The Obamacare Penalty: Yes, It Can Be Avoided

[dmcowen674]

10-25-2013

http://finance.yahoo.com/news/does-the-obamacare-penalty-actually-have-teeth--144740030.html

The Obamacare Penalty: Yes, It Can Be Avoided



Conservative radio talk show host Rush Limbaugh picked up on this subject on his show this week, telling listeners: “The only way that they can collect the penalty or the fine is by taking money from your refund. If you are not owed a refund, they cannot get money from you.”


As Limbaugh explained on his show, “If you structure your taxes so that you do not get a refund, you do not have to buy insurance and you do not have to pay a fine 'cause they can't collect it from you if you don't have a refund due. "

 

[dmcowen674]

Of course Rush and the Republicans would skirt the law.

 

[Mr. Pedantic]

Is this the way US taxes work? The government can "only" collect from you if they owe you something at the same time?

No wonder you have a deficit the size of the universe.

 

[Matt1970]

Of course Rush and the Republicans would skirt the law.

Link to Republicans skirting the law?

 

[Gonad the Barbarian]

Is this the way US taxes work? The government can "only" collect from you if they owe you something at the same time?

No wonder you have a deficit the size of the universe.

No, only this specific penalty/tax works this way.

 

[thraashman]

So ... intentionally don't do things that might get you a refund so that you don't have to have health insurance? This sounds a bit much like cutting off the nose to spite the face.

 

[onlyCOpunk]

So ... intentionally don't do things that might get you a refund so that you don't have to have health insurance? This sounds a bit much like cutting off the nose to spite the face.

Agreed. The type of people who would have the knowledge to structure their taxes in such a manner are the type of people who would have not only health insurance, but more than likely the best health insurance..

 

[trenchfoot]

n/m. Re-read the article I previously posted here and I stand corrected.

 

[Matt1970]

So has anyone ever structured thier taxes so they have just the right amount taken out and owe abslutely nothing at the end of the year?

 

[Nintendesert]

So has anyone ever structured thier taxes so they have just the right amount taken out and owe abslutely nothing at the end of the year?

Derp. Yes. Plenty will even owe uncle Sam. So free loan and no health insurance penalty seems like a win win to me.

 

[nickbits]

So has anyone ever structured thier taxes so they have just the right amount taken out and owe abslutely nothing at the end of the year?

That is my goal but so I haven't hit the mark.

 

[werepossum]

So ... intentionally don't do things that might get you a refund so that you don't have to have health insurance? This sounds a bit much like cutting off the nose to spite the face.

LOL Most of us know that a tax refund is the return of our EXCESS tax payment, NOT behavior that gets you free money. In fact, it amounts to making a zero interest loan to Uncle Sam. If you do not understand that, I can see how you might feel that way.

Everyone knows this will stand only for a couple years before enforcement changes, and that tax will only increase with interest and penalties. One thing you don't do is mess with the government's tax money, and one might well end up losing one's house avoiding a fairly minor tax out of principle. Assuming one is stupid enough to buy a house before health insurance anyway. If one is truly opposed to health insurance (or government mandates in general) then I suggest structuring one's life like tax protesters - the smart ones who have nothing in their names. That way when you eventually go to prison you want have to worry about the assets you leave behind. Personally I'd put people in prison for avoiding Obamacare at the same intellectual level as those in prison for robbing a doughnut shop or a gun store (assuming any of those survive to be prosecuted) but YMMV.

 

[sactoking]

I've been saying this for over a year. There are other ways to game the system too, some of which I've disclosed on AT. This one isn't far-fetched, everyone should be adjusting their withholding annually anyway, and the IRS even provides a worksheet or two to help.

 

[Matt1970]

Derp. Yes. Plenty will even owe uncle Sam. So free loan and no health insurance penalty seems like a win win to me.

Derp. Reading fail.

 

[Genx87]

Yes this was the poison pill the Supreme Court put into the law. They essentially gutted the ability of the govt to make people pay unless they are owed a tax refund.

 

[piasabird]

I will give you all a warning. When you owe tax money they can take your house.

Here is another problem. What if a lot of taxpayers decide not to file taxes?

Why do Democrats want to give the IRS more power?

Isnt that stupid?

 

[drebo]

I will give you all a warning. When you owe tax money they can take your house.

Here is another problem. What if a lot of taxpayers decide not to file taxes?

Why do Democrats want to give the IRS more power?

Isnt that stupid?

Liberals and progressives thrive on the emotional here and now. Forward thinking and planning doesn't enter into the equation.

 

[WackyDan]

I will give you all a warning. When you owe tax money they can take your house.

Here is another problem. What if a lot of taxpayers decide not to file taxes?

Why do Democrats want to give the IRS more power?

Isnt that stupid?

No... You don't understand.

It is a penalty, not a tax. The IRS can not enforce collection on the penalty if you choose to avoid it. They can not garnish wages, can not charge you and send you to prison, etc. I'm not even sure they can charge interest on it. That is the way the penalty was written into Obamacare... Why? Because if they called it a tax (which is essentially what they wanted) it would have upset more people... or something.

Now, they can change the law and thus either charter the IRS to enforce the penalty or simply call it a "tax" and the IRS can enforce it under their current authority. *but it will take an amendment to the ACA to do so.

So for now, those that fall into the bucket of people who would buy their own health plan can avoid the penalty by owing more than the penalty and cumulative penalties year to year on their income taxes. And there isn't shit the gov't can do to you for it as of yet.

 

[shira]

So has anyone ever structured thier taxes so they have just the right amount taken out and owe abslutely nothing at the end of the year?

You don't need to "owe absolutely nothing" to accomplish the objective stated in the OP. You're allowed to under-withhold by up to 10% without owing a penalty. So if your total tax liability is, say, $10,000, then if you withhold $9000 by January 15 you won't owe a penalty when you file your tax return (and pay the additional $1000 owed) by April 15. And there won't be any tax refund for the IRS to "garnish" for failure to obtain health insurance.

 

[KK]

So all the project/trailer trash people will not have insurance and won't be penalized. Good idea this obama care is. The same folks that didn't have health care before still won't.

 

[Auric]

"Ima get sick and die just to spite that sumbitch!"

Also, does Limbaugh practise what he preaches and forgo health insurance? Hmmm?

 

[MagickMan]

So all the project/trailer trash people will not have insurance and won't be penalized. Good idea this obama care is. The same folks that didn't have health care before still won't.

Yep, most of them don't pay or file taxes, so this changes almost nothing. What an epic win for Obama. :whiste:

 

[MagickMan]

"Ima get sick and die just to spite that sumbitch!"

Also, does Limbaugh practise what he preaches and forgo health insurance? Hmmm?

Correct, he has a HSA.

 

[Sonikku]

n/m. Re-read the article I previously posted here and I stand corrected.

These kinds of posts don't really belong in P and N.

 

[sactoking]

Yes this was the poison pill the Supreme Court put into the law. They essentially gutted the ability of the govt to make people pay unless they are owed a tax refund.

The Supreme Court had nothing to do with this, it was in the ACA as originally written.