Who Form 1094 B Deductions 2023-2024

Hi, my name is Keith. Welcome to another "Minute by Minute" segment. By now, most of you have heard of the Affordable Care Act (ACA) and understand that if you don't have an ACA-compliant health insurance policy, you'll pay an extra tax on your tax return. Many of you have chosen to forgo the ACA-compliant plan and opt for a cheaper policy based on your family's specific circumstances. You choose to pay the penalty and save a few dollars because the policy is less expensive. It's important to know exactly what that penalty will be. The penalty is calculated in two different formats, and you have to pay the higher of the two calculations. The first calculation is a set dollar amount per person, which is $695 per person plus half that amount for each child under age 18. The second calculation is 2.5% of your household income. Remember, you will pay the higher of these two calculations. The first calculation is relatively easy. For a single taxpayer, the penalty is $695. For a married couple, it's $695 each or $1,390 total. If you have two kids, it's an additional $347.50 per child, totaling $2,085. If you have more than two kids, the penalty is still capped at $2,085. The second calculation is a bit more difficult. It's 2.5% of your household income, which is your adjusted gross income. You need to add back any tax-free income, such as tax-free interest on municipal bonds or nontaxable social security benefits. Then you subtract the filing status threshold amount for your filing status. For example, if you're single, the threshold is about $10,500. If you're married filing jointly, it's about $20,500. Take your household income minus the filing status threshold times 2.5% to calculate your penalty. Remember to compare both calculations and pay the higher one. Let's...