Washington Reforms Health Care And Taxes
Sunday’s night’s health care bill will go down as one of those once-in-a-generation accomplishments. I’m not here to debate the merits of the bill – historians will still be doing that decades from now. But it’s important to point out some important tax changes included in the bill and the companion “reconciliation” bill now before the Senate. (Just how important are they? Well, the Congressional Budget Office says the IRS will need $10 billion and 17,000 new employees to enforce its share of the new rules!)
Here are some of the key tax provisions:
- Starting immediately, certain small businesses with less than 10 employees will get a 35% credit for the cost of providing employee health benefits.
- Starting in 2011, employers will have to report the value of health benefits on Form W2.
- The penalty tax for Health Savings Account distributions not used for health care expenses doubles from 10% to 20%. This will discourage using HSAs for supplemental retirement savings.
- Starting in 2013, the 7.5% floor for deducting medical and dental expenses climbs to 10% (unless you or your spouse are 65 or older, in which case it remains at 7.5% until 2016).
- Healthcare flexible spending account contributions are capped at $2,500 per year.
- Starting in 2014, businesses with more than 50 employees will have to offer heath benefits or pay a penalty of $750/employee.
The reconciliation bill includes one more unwelcome surprise. Currently, the Medicare tax is limited to 2.9% of earned income. The reconciliation bill imposes an additional Medicare tax of 0.9% on earned income above $200,000 (individuals) or $250,000 (families). It also adds a 3.8% “Unearned Income Medicare Contribution” on investment income – specifically, interest, dividends, annuities, royalties, capital gains, and rents – for taxpayers with Adjusted Gross Income above those same thresholds. Those new levies would take effect in 2013.
The complete bill is 1,018 pages, so it’s going to take some time to analyze. But we’ll be paying close attention as details become available. In the meantime, call us with any questions!
Emil Estafanous, CPA provides an integrated suite of tax preparation, tax planning, tax advocacy, payroll, QuickBooks mentoring and financial planning services for businesses and individuals.
Let me give your pres particularly a similar regard you gifted mine
I absolutely concur with the earlier opinion, the the web is actually with out a doubt growing in to the most crucial form of communication around the world and it’s credited to websites such as this that ideas are distributing so rapidly.
thanks amigo! great post!
This really is this kind of a fantastic useful resource that you are providing and you give it away free of charge. I love seeing web websites that comprehend the worth of offering a quality resource free of charge. It?s the old what goes around comes about program.
You made a number of nice points there. I did a search on the topic and found a good number of people will have the same opinion with your blog.
This blog site is really good. How did you make it .
Your website is so helpful … keep up the good work! Also, is your wp theme a free one? and if so..can i have it?
Just killing some time on Digg and I found your post . Not normally what I like to read about, but it was certainly worth my time. Thanks.
I want to thank you for sharing the following info. I’ve just discovered how to use the world wide web and am just catching up to these young whippersnappers.
You certainly have some agreeable opinions and views. Your blog provides a fresh look at the subject.
Great Post. I add this Post to my bookmarks.
You certainly deserve a round of applause for your post and more specifically, your blog in general. Very high quality material.
Thanks For This Blog, was added to my bookmarks.
I just book marked your blog on Digg and StumbleUpon.I enjoy reading your commentaries.
You certainly deserve a round of applause for your post and more specifically, your blog in general. Very high quality material
Every time I find out a really great post I do a few things: 1.Share it with all the (blank) close friends .2.save it in all of the favorite social sharing web sites.(blank).Make sure to return to the blog site where I read the post. After reading this post I am seriously concidering doing all 3! ))))
As a Newbie, I am always searching online for articles that can help me. Thank you
A+ would read again