If you did not have health insurance for more than two months in 2016 then you may owe a tax penalty when you file this year’s tax return.
- You may also hear from the IRS about the penalty if your health insurance did not meet minimum federal requirements or if the required tax filings are not completed correctly. This will cause the RS to withhold your refund payment next spring. Avoid problems by handling this in advance.
- The maximum tax penalty for 2016 is $2,085 but there may be ways to avoid or reduce it. The law offers a number of options but some require early action. Act now for the best chance to avoid the penalty.
- There will be changes (and even possibly repeal) of the tax penalty for 2017 but it is too soon to know.
I urge anyone who may be affected to include a discussion of this issue with your early tax planning as soon as possible. Some who wait will incur penalties that could otherwise have been avoided by earlier action.