The 5000 is subject to self employment tax, roughly 750.
Yes and I forgot about the Obamacare tax(if no other insurance or exemptions) that will still apply for next year. I am not sure about the rules on that. But people could potentially be paying zero in federal taxes, and yet a significant “penalty” for Obamacare.
Follow up. Those making less than 9500 are exempt form the Obamacare tax. At or above that threshold the minimum tax kicks in. That was 695.00 for 2016. But it is tied to the CPI this year. So I don’t know how to compute the minimum tax for this year. But I bet that it is no less than last year.
So if you have a $9500 income and no other exemptions from the mandate then you would pay zero in federal taxes and yet $695.00 or more for the penalty. Or 7 to 8% of your income.