IRS Announcement Confirms 'Tax Penalty' Application
from Read more:
(snip)"Your 2014 tax return will ask if you had insurance coverage or qualified for an exemption. If not, you may owe a shared responsibility payment when you file in 2015.
In “The Individual Shared Responsibility Payment- An Overview” the agency warns Americans they must prove they were covered each and every month of the year:
For any month in 2014 that you or any of your dependents don’t maintain coverage and don’t qualify for an exemption, you will need to make an individual shared responsibility payment with your 2014 tax return filed in 2015.
In “IRS Reminds Individuals of Health Care Choices for 2014 ”the agency details the calculations Americans can look forward to if they are liable for the tax:
If you (or any of your dependents) do not maintain coverage and do not qualify for an exemption, you will need to make an individual shared responsibility payment with your return. In general, the payment amount is either a percentage of your household income or a flat dollar amount, whichever is greater. You will owe 1/12th of the annual payment for each month you (or your dependents) do not have coverage and are not exempt. The annual payment amount for 2014 is the greater of:
•1 percent of your household income that is above the tax return filing threshold for your filing status, such as Married Filing Jointly or single, or
•Your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a maximum of $285.
As confirmed by previous IRS testimony to the tax-writing House Committee on Ways and Means, “taxpayers will file their tax returns reporting their health insurance coverage, and/or making a payment”.
Once fully phased in, the Obamacare individual mandate tax will rise steeply, to a maximum of 2.5 percent of Adjusted Gross Income or $2,085 – whichever is higher"(snip)
#1 important take-away for dancers and camgirls is that the new IRS tax penalty for failure to purchase 'qualified' health insurance is being applied on a monthly basis effective from last January. This means that Americans who did NOT have 'qualified' health insurance coverage in place last month 'already' owe the new tax penalty on income earned during the month of January. When March 1st arrives they will owe the new tax penalty on income earned during the month of February, and so on.
#2 important take-away for independent contractor dancers and camgirls is that, unlike the 'employees' referenced in the IRS release who can avoid an estimated tax withholding penalty because their EMPLOYER withheld taxes from employee paychecks, independent contractors may face an estimated tax withholding penalty if they fail to include the amount of new penalty tax due in any quarterly period for which they did not have 'qualified' health insurance coverage.
Or stated another way, for independent contractor dancers and camgirls who do not have 'qualified' health insurance, their April 15th first quarter estimated tax payment must include not only the amount of Social Security taxes and income taxes owed on income earned from Jan 1st to April 1st, but must also now include an additional 1% penalty tax.
It is also 'rumored' that part of the new IRS enforcement effort ( i.e. the ACA provided funding for the IRS to hire thousands of new auditors and agents ) will involve 'cash' businesses ... which includes dancing and camming. As such, it is likely that more IRS attention will be directed towards quarterly estimated tax payments by those businesses ( or lack thereof ).



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