Starting in 2013, unearned income will bear an extra 3.8% surtax. This includes capital gains. This means that one should probably consider taking capital gains in 2012 to avoid this law. This also means that perhaps sales to family members using self cancelling installment notes, might be advisable in 2012 and recognizing the gain in 2012 even though you don’t yet have the cash. With the real estate market still recovering slowly at best, its a good year for intrafamily sales since fair market values are low.
Monthly Archives: July 2012
Exceptions to Individual Mandate
There are at least six exemptions from paying the Individual Mandate:
1. Religious Exception. If you are a Christian Scientist who does not believe in health care, you do not have to pay the mandate.
2. Native Americans. If you are a member of a Tribe, you will be covered under Tribal Health Plans and not have to file.
3. Illegal Aliens. Yes, you guessed it, if you’re not supposed to be here, you don’t have to pay the Individual Mandate even though the Emergency Care Act says that the Hospital has to treat you without insurance. Gotta love this one.
4. Prisoners. You get health care of some sort in prison. Free dental work as well.
5. You can’t afford health insurance. This provision will likely generate at least 100 pages of regulations concerning affordability. Presumably, it will be based upon standards of living already contained in the Internal Revenue Manual for collections. These vary from locale to locale.
6. Below the filing Threshold. If you’re single under sixty-five and earned under $9500, you’re exempt. If you’re over 65 and earned under $10,950, you’re exempt. If you’re married filing jointly that is $19,000 under 65 and $20,150 over 65.
7. Under 18, your tax liability is divided by two for no apparent reason.
So, not everyone is subject to the tax. Soon, we’ll discuss who pays for this.