I had lived in California last year and moved out of country in September. Now I'm facing health insurance penalty and thinking what if I wait till 2018 to file both 2016 and 2017 taxes together. Is this a good idea? I found out that one can be exempt from health insurance penalty if resided overseas for at least 330 days in any 12-month period. I don't owe any taxes in 2016 and I haven't had a job since September, so no income to file from overseas fyi. I'm looking for a job here, so it is very likely that I'll file as a bona fide resident for 2017. Please Advise.
Hello,
No need to do that. IRS just changed their rules. You are no longer obligated to answer the health care question. You can skip it and IRS will still accept it, thus avoiding all penalties. Turbo Tax is updating their software and will reflect this change starting March 2nd.
Hi,
Thank you for that information. I looked into it, but it looks like I would end up still paying the penalty. Here's what I found: "The IRS noted that tax filers remain responsible for any Obamacare penalty they owe. It also said that taxpayers who don't disclose their insurance status could end up getting questioned by the agency"
What are the chances of not having to pay the penalty when I skip health care questions in your opinion?
The IRS legally has to say that because they can't legally dismiss the penalty, yet. However, I feel the changes are extremely high that they will ever look into it, especially considering Trump and Republican's plan to repeal Obamacare all together.
I am filing for the year 2017 and was not in the country for 3 months which was also the time when I did not have health insurance. I am an international on my OPT. For now, I don't see options to skip the healthcare section. Will I have to pay the penalty for those 3 months I was not in the country?
I have a similar problem.
My family and I moved to the US, with a job, in May of 2017. Since then, we have health coverage through my job.
Our tax return was filed by our tax accountant with the full year health coverage box, on line 61, unchecked.
And this resulted in penalty:
> Our records show you have an unpaid shared responsibility payment for the tax year ending December 31, 2017.
You owe this payment because one or more members of you tax household didn't have minimum essential health coverage.
Your balance of $ X is due immediately.
If you already paid your balance in full within the past 14 days or made payment arrangements, please disregard this notice.
Now my questions:
1) In this situation of moving to the US as a tax individual, did we have full health coverage for the year of 2017?
2) What should I do to fix it? Send a letter (what my tax accountant recommended me) proving I got here in the middle of the year and had coverage since then, or just submit a form 1040x with the line 61 checked?
P.S.: I've explained my situation over a phone call and in a IRS office appointment, but they were not able to guide me in this situation.
If you had health coverage half the year it should be marked somewhere on your tax return and you should only be penalized half the year. However, I read that Trump administration told IRS not to penalize anyone for health care. I would just mark you had it the whole year, they won't come after you. If they ever do find out then you just pay at that time. Take the risk and don't pay any penalty.