Obamacare Tax Penalty

Line 61 on the 2014 income tax return is where the penalty ends up on your return. It is called the individual shared provision and you owe it if you do not have health insurance coverage for all 12 months of 2014. The maximum penalty is based on the bronze level health plan which is $2,448 per individual. The penalty is the greater of a family maximum of $285 or 1% of your household income above the tax return filing threshold for your filing status. I think most people will pay at the 1% of household income figure. For example, a married couple with 2 children and $70,000 of adjusted gross income would pay a penalty of $497 for 2014. The calculation would be as follows: $70,000 minus the filing threshold of  $20,300 equals $49,700. One percent of $49,700 is $497 which is greater than the flat amount of $285 but under the cap of $2,448 x 4 or $9,792.  The penalty doubles to 2% in 2015.