[miclus]

Hi. I have a return this year where I will owe money. Part of it is for the no healthcare fee. However, I am not going to pay that portion. Does anyone know if that's possible through software like TaxAct or TurboTax that automatically calculate what you owe?

[Fr_Chuck]

Are you just going to ignore that line of forms and pretend you don't owe it. Or have it show you owe the money and just refuse to pay ?

[miclus]

Hi, Chuck. I was going to have it show I owe but not pay.

[ebaines]

You can always override the number shown in the cell for money owed (you can override any cell in TurboTax). But of course if in fact you owe the money the IRS will quickly catch it.

[suntaxfla]

The IRS will deduct this amount from future refunds, but they cannot lien or levy property for this amount. Neither does the taxpayer face criminal penalties.

[joypulv]

suntaxfla, what about penalties and interest? They used to be very high.

[AtlantaTaxExpert]

Failure to pay penalties is 1/2 of 1% per month not paid, plus an annual interest amount (about 5%).

[suntaxfla]

Aha... that's where it gets complicated.

The monthly penalty amount for any month is equal to ¹/₁₂th of the greater of:• a calculated flat dollar amount ($695 for 2016)
• a specified percentage of the excess of household income (defined with respect to “modified adjusted gross income”) over the gross income filing threshold under §6012(a)(1). The latter depends upon your filing status.
“Modified adjusted gross income” for most people will be the same as line 37 on the 1040. The specified percentage of household income is 2.5% for 2016 and later.

The applicable dollar amount for individuals younger than age 18 is one-half of the dollar amount, and The total penalty is limited to 300% of the penalty amount for the calendar year with or within which the taxable year ends, as determined without regard to the reduction for individuals under age 18.
In no event can the monthly penalty exceed the monthly national average bronze plan premium.

Hope that helps. Let me know if you have more questions.

[joypulv]

... and all the talk about simplifying the tax code....

[suntaxfla]

Well... that's not really the topic of this forum.

[AtlantaTaxExpert]

ANY simplification of the IRC will inevitably result in the lower half of the income strata paying more on a per capita basis than those who are wealthier and better able to pay the higher taxes.

That is why the "Fair Tax" and "Flat Tax" arguments never gain any traction, because once someone looks hard at the numbers, they realize these schemes results in a massive tax break for the top 10% of the population at the expense of everyone else.

[joypulv]

Oh I know I was off topic; couldn't resist.

[AtlantaTaxExpert]

Noted!

[joypulv]

And your remarks noted!