LUFKIN, TX (KTRE) - People who did not sign up for health insurance this year can soon expect a fine from the IRS.
After President Barack Obama announced the launch of the federally mandated healthcare program, citizens were required to sign-up for insurance or face a fine. The fine this year will be either 1% of a person's income or $95, depending on which is higher. Experts say this number may seem low now, but the fine is set to rise over the next several years.
Jeff Todd with the Advanced Financial Group said in 2015, the penalty is going to change.
"It will go up to 2 % or $325," Todd said.
Todd added the numbers will only increase from those. According to the IRS website. In 2016, a person over 18 years of age will be fined 2.5% or $695. The site says after that, the cost will be adjusted for inflation in the following years. Todd argued that despite the fine, many people see that as the more affordable way to go.
"What many people are telling me is that the Affordable Care Act is not that affordable," Todd said. "By the time you pay your premium and your out of pocket exposure you have, it still doesn't work for people."
Todd's co-worker John Kennedy said that as important as this year's tax season is to people, it is just as important to prepare for next year's returns.
"If you have it in your pocket and you owe it to someone you can pay them," Kennedy said. "it makes it easy."
Kennedy said his biggest advice is for young people entering the workforce. Kennedy said the best thing to do is invest in a ROTH IRA.
"When you force yourself to start saving a little bit when you are young and let the magic of compounding work for you over a long period of years on money, that regardless of what administration is in power and how they might change the tax laws, it will not affect those dollars because they are growing tax free and not tax deferred," Kennedy said.
Kennedy said by doing this, it can save from future tax headaches.
The deadline for open enrollment for the 2015 Affordable Healthcare Act ends Feb.1.
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