Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
ACA, contracting and penalties
Old 12-11-2015, 09:35 AM   #1
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
ACA, contracting and penalties

I am transitioning from working for a Mega Corp to contracting my skills.
Jan 1 2016 I will no longer have healthcare

I tend to contract my time for between $30-$75 per hour, and I have "never" not had health care. Dec 31 my current plan terminates and I will either need to pay some ACA tax, or get health care on my own.

To complicate matters, I live in Cincinnati Ohio, and will likely be working a contract in Detroit area or Buffalo area Feb 1.

Can someone explain the legal side of having health care (or choosing not to have it) and what penalties will be owed (for example if I am without health care for January, but have it rest of year, do I owe a penalty).

I am 42 yo and divorced
My kids are on their mothers policy
I am less familiar with Obamacare and the requirement to carry insurance (or pay a non insurance penalty). Anyone want to set me straight on their understandings of my options?

examples of what I read
Quote:
Penalties for those without medical coverage: The penalty started at $95 or 1% of income (whichever is greater) per person in 2014. It gradually rises until it hits 2.5% or $695 (whichever is greater) per person in 2016.
Quote:
The Affordable Care Act, requires that almost all U.S. citizens and legal residents (and their dependents) have health insurance for the entire year. This requirement started on January 1, 2014. There is a tax fee for not having health insurance during the year. There are very few exceptions to this requirement, so you may qualify for a tax payment exemption.
Quote:
Who is Required to Have Health Insurance?

You must have have qualifying health insurance, qualify for an exemption, or make a payment for not having insurance when you file your tax return if you are one of the following:
A U.S. citizen OR
A non-U.S. citizen living in the United States.
Quote:
How Will I Report My Health Insurance Coverage on My Tax Return?

If you have health insurance, you only have to check a box on your tax return (1040-EZ, 1040-A, or 1040) showing that you had health insurance for the year. When you prepare your tax return on efile.com, the software will ask you if you have health insurance, and once you answer "Yes," the software will automatically check the appropriate box on your return (so you don't have to!).
Though you cannot file 2015 tax returns yet, you can sign up for your 2015 tax return by click the button below. We'll send you an email letting you know when you can start preparing your 2015 return online!
Quote:
What If I Don't (or Won't) Have Health Insurance?

If you can afford health insurance but choose not to buy it in any month during the Tax Year, generally you will need to pay a fee that is known as the individual shared responsibility payment when you file your Tax Return on efile.com. You might be able to obtain an exemption from the payment, but that is only for certain circumstances. The payment may cause your tax refund to be lower, or might result in higher taxes due on your tax return.
__________________

__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-11-2015, 09:55 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 1,645
try this one
Quote:
Paying the fee

Using the percentage method, only the part of your household income that’s above the yearly tax filing threshold ($10,150 for individuals, $20,300 for couples filing jointly in 2014, the most recent year available) is counted.
Using the per-person method, you pay only for people in your household who don’t have insurance coverage.
If you have coverage for part of the year, the fee is 1/12 of the annual amount for each month you (or your tax dependents) don’t have coverage. If you’re uncovered only 1 or 2 months, you don’t have to pay the fee at all. Learn about the “short gap” exemption.
You pay the fee when you file your federal tax return for the year you don’t have coverage.
So if you are missing 1 or 2 months, there is an exemption for the fee.
That said, if your income is 0 for that month, you may be able to get medicaid. Or will you be getting a check for January (like for unused vacation?)

without insurance... hope you don't need healthcare
__________________

__________________
bingybear is offline   Reply With Quote
Old 12-11-2015, 10:02 AM   #3
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by bingybear View Post
try this one


So if you are missing 1 or 2 months, there is an exemption for the fee.
That said, if your income is 0 for that month, you may be able to get medicaid. Or will you be getting a check for January (like for unused vacation?)

with not insurance... hope you don't need healthcare
On the contract I worked May-October, I negotiated a deferred payment structure which paid 22% of my pay when he received the payment from the customer- those commissions paid Oct 1, Nov 1 and Dec 1, so he took health insurance out of each check for me.

The contract I am working now (Nov 1-Feb 1) does not have health insurance. I have several good prospects, and know with a Detroit relocation I will find work quickly... the automotive industry needs PLM subject matter experts and pays in $60-$120/hr range so that works.
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Old 12-11-2015, 10:06 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: Florence, AL/Helen, GA
Posts: 2,085
I had a son in law that owned his own business, and was very successful. He had a huge house with a pool and a 6 bay garage packed full of drag cars, ATV's and other toys. But he never purchased healthcare for himself, my daughter and their 3 children.

My granddaughter came up type 1 diabetic at age 11, and was in and out of the hospital for a few years. Her maintenance was extremely expensive @ $130 per bottle of insulin. She ended up with an enlarged heart, weak kidneys, scoliosis and died with stage 4 bone cancer at age 22. Poor healthcare under Medicaid was little help to her.

My daughter had heart valve problems, and suddenly had a fatal arrhythmia only to be revived about 9 minutes without air. She's very frail for being so young, and unable to work. And she's no longer the same person.

Our son in law was feeling bad, but Mr. Macho was too much of a he-man to pay for a doctor's visit. As time went on, he self medicated with pills and illegal drugs. By the time he found out that he had multiple myeloma, only a stem cell transplant would help. He died with amliadosis and a massive blood stream infection.

Having healthcare is part of being a responsible adult. You have the choice of the ACA and going to the open market with someone like Blue Cross/Blue Shield. If you go the ACA, you better get moving because enrollment closes Tuesday night.

Our daughter's family might have not disintegrated had they done without such materialism and chosen to invest in their health.
__________________
Bamaman is online now   Reply With Quote
Old 12-11-2015, 11:08 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Jul 2012
Location: Mississippi
Posts: 1,878
Quote:
Originally Posted by jIMOh View Post
Can someone explain the legal side of having health care (or choosing not to have it) and what penalties will be owed (for example if I am without health care for January, but have it rest of year, do I owe a penalty).
The FAQS at healthcare.gov will answer most of your questions. There is short term gap exemption

https://www.healthcare.gov/fees/

Open enrollment ends Jan 31, but for coverage to start Jan 1st you must enroll by Dec 15th
__________________
rbmrtn is online now   Reply With Quote
Old 12-11-2015, 11:14 AM   #6
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,040
If you have a business, it will be a tax deduction. Be sure to set up your company so you can deduct it.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is online now   Reply With Quote
Old 12-11-2015, 12:04 PM   #7
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by Senator View Post
If you have a business, it will be a tax deduction. Be sure to set up your company so you can deduct it.
I usually contract through third party "staffing" firms which prevents me from doing this. I do have 3 LLCs I could run contract through, I have never invoiced so unsure of those details... bookkeeping is not my strong suit.
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Old 12-11-2015, 12:10 PM   #8
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,128
Quote:
Originally Posted by jIMOh View Post
I usually contract through third party "staffing" firms which prevents me from doing this. I do have 3 LLCs I could run contract through, I have never invoiced so unsure of those details... bookkeeping is not my strong suit.
If you are getting 1099's, you have a business.

If accounting is not your strong suit, it will be money well spent hiring a firm to handle it for you. There are lots of small accounting firms that cater to small businesses.

With respect to healthcare, we all get older and many of us actually get sick before we die.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 12-11-2015, 12:25 PM   #9
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by aja8888 View Post
If you are getting 1099's, you have a business.

If accounting is not your strong suit, it will be money well spent hiring a firm to handle it for you. There are lots of small accounting firms that cater to small businesses.

With respect to healthcare, we all get older and many of us actually get sick before we die.
I get a W-2 paycheck
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Old 12-11-2015, 12:45 PM   #10
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 7,128
Quote:
Originally Posted by jIMOh View Post
I get a W-2 paycheck
I'm surprised! You are an employee.

I contract also and receive 1099's.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 12-11-2015, 01:12 PM   #11
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by aja8888 View Post
I'm surprised! You are an employee.

I contract also and receive 1099's.
I contract- the employment entities are loosely defined staffing companies which offer no value to me, and a legal in between for the company I work for, the company I provide service too and the issue is many of these entities don't offer healthcare.

So I am looking into getting healthcare on my own
or only working for the contract houses which offer it (I can do this in Detroit, tougher to do in other places based on demand and volume).
__________________

__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Sole Proprietership vs. Contracting (LLC) kgtest Other topics 14 12-23-2014 06:47 PM
w*rk advice - contracting WM Other topics 12 07-01-2011 03:46 PM
annuities and penalties? bentley FIRE and Money 0 10-29-2009 08:52 PM
ER and Which Accounts to Tap (Penalties & Taxes) chinaco FIRE and Money 8 06-12-2007 08:02 PM
Anybody Cash out early, pay penalties and start their own business? vicmost Young Dreamers 10 01-16-2006 03:02 PM

 

 
All times are GMT -6. The time now is 08:16 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.