Your taxes and Obamacare

[Destroyer]

Your taxes and Obamacare

If this doesn't get to you, then check your pulse. You may be a flat line... Should you want to verify this, go to http://www.thomas.gov/, enter H.R. 3590 in the search box and look for "CRS Summaries." This is what you'll find.
Title IX Revenue Provisions***8212;Subtitle A: Revenue Offset "(Sec. 9002) Requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer-sponsored group health coverage that is excludable from the employee's gross income (excluding the value of contributions to flexible spending arrangements)."

Starting in 2011***8212;next year***8212;the W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are provided. It doesn't matter if you're retired. Your gross income WILL go up by the amount of insurance your employer paid for. So you***8217;ll be required to pay taxes on a larger sum of money that you actually received. Take the tax form you just finished for 2009 and see what $15,000.00 or $20,000.00 additional gross income does to your tax debt. That's what you'll pay next year. For many it puts you into a much higher bracket. This is how the government is going to buy insurance for the fifteen (15) percent that don't have insurance and it's only part of the tax increases, but according to Obama it's not really a "tax increase" as such, it's just a redefinition of your taxable income.
Also, go to Kiplinger's and read about the thirteen (13) tax changes for 2010 that could affect you.

Why am I posting this? The same reason I hope you post this in every other forum you visit. People have the right to know the truth because an election is coming in 2012. So vote intelligently, based on your values. But also adjust your tax withholding, or increase your savings, so that you aren't surprised and put in a jam when your federal income taxes are due on April 15, 2012. :head:

Fight organized crime! Re-elect no one. :bat:

[Road King Cole]

"So vote intelligently"

I just hope there is someone intelligent to vote for next time. I did a wasted "protest vote" last time as I also wasn't that excited about McCain. Perhaps I (and a lot of others) should have voted for him just to keep obama out...

btw, I like your new "fancy dancy" signature...

[RWilson2526]

We've had this discussion before....you are going to need to show me where the amount that will be required to be "reported" on your W-2 will be considered taxable income. From what I have learned the gubbermint is requiring that how much each persons employer pays for healthcare will be required to be reported on W-2's some some hard numbers of what healthcare is costing individuals can be documented. I cannot find anywhere that says it will be added to your taxable income.

http://www.factcheck.org/2010/05/health-care-law-and-w-2-forms/
http://www.kiplinger.com/businessresource/forecast/archive/health-care-reform-tax-hikes-on-the-way.html
http://www.wscpa.org/Content/39530.aspx
http://www.associatedcontent.com/article/5807766/tax_impact_of_affordable_care_act_of.html?cat=3

[willy]

RW I don't know where it is, I do know that my previous employer from where I retired has been notified of exactly what it says in that post.
Perhaps it is buried in the 2400 pages of the Obamacide that no one has finished reading yet. Or maybe a regulation passed sans Congress by the regulation Czar Cass Sunstein, or maybe by one of the regulations passed by one of the other Czar's of the current Politboro in the executive branch.
We will be told when it is time for us to know.

[Destroyer]

RW, you're right, we have had this discussion before. I reopened it because of something I was told the other day from the controller of the company I work for. She told me that, according to everything she has been told, and the classes that she's attended in order to understand the new health care law(s), we will, indeed have to pay taxes on that part of health care that is provided by our employers.

So in other words, and for the sake of discussion, lets say your health care plan costs $20,000 a year overall and that your employer pays for 50% of your health care plan and you pay for the other 50%. The part that you pay ($10,000) is not taxed, because it's an expense, but the $10,000 that your employer pays will be considered as income and will be taxed. She went further and stated that they will probably hand out 1099 forms for the additional income. (No, I don't know why) Now, I admit, this is all supposition and may or may not be the actual law, but, like I said, she's gone to courses already, and in them they are teaching that it is going to be treated as income. She's also a Senior VP in the company I work for, is the Controller of our company, is a C.P.A. and is pretty smart. She might be wrong. I might be wrong. The whole subject might be academic if the health care bill is ruled unconstitutional. But in all cases, it's an indication of the way that the present corrupt political government (left and right) in Washington is trying to screw the people of this Nation. We started to clean the cesspool this November past... we have to always remember that we need to complete the job in 2012. :bat:

[RWilson2526]

All right where is the "head banging against the wall" emoticon? Not saying its not going to happen someday, but I will blow you in Macy's window if I pay taxes on my health insurance for 2011.:fam:

http://www.kiplinger.com/columns/washington/archives/no-health-benefits-wont-be-taxed-.html

http://www.huffingtonpost.com/linda-bergthold/no-your-health-insurance_b_641937.html

http://www.politifact.com/truth-o-meter/statements/2010/jun/10/chain-email/w-2-tax-forms-hr-3590-health-insurance-pay-taxes/

http://www.boston.com/business/personalfinance/managingyourmoney/archives/2010/09/my_company_pays.html

[garagenc]

Hey RW

The boys are right about it being taxable.
I got info from the IRS telling me (and my accountant for the company) that says any money I put toward Employee health insurance is now part of the gross taxable sum that goes on the W2 form.

[RWilson2526]

Guys.....It is published in 100 different places that it is not....somebody PLEASE show me in writing from somewhere that it will be TAXED.... It may very well be listed under wages, tips and other compensation (which would be what your business accountant might say) but when you reconcile your tax dollars when filing, according to the current passed legislation it will not be taxed!.... It may very well read something like : Gross wages and compensation X dollars (which will include the health premiums) .....net taxable income X dollars(which will take out all your other deductions and the health premiums)....so your accountant would be correct in saying that the number would be added to your adjusted gross income but are your sure he said "TAXABLE" income....
Your adjusted gross income and your taxable income are not the same thing.

Look the Macy's thing was probably a bad idea but I got $300 to put up that you can split between as many of you that still believe this that at least as of 12/14/2010 your health insurance premiums will not be taxed in 2011 and starting in 2018 it will be taxed if it is over $27500.

Unfortunately I guess we wont know for a year until we file for 2011 who's right or wrong but in the meantime somebody please show me from some source other than my accountant said so that it will be taxed.

[RWilson2526]

Title IX Revenue Provisions***8212;Subtitle A: Revenue Offset "(Sec. 9002) Requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer-sponsored group health coverage that is excludable from the employee's gross income (excluding the value of contributions to flexible spending arrangements)."


And one last thing I just noticed...this is right from Destroyers original post....

[Franco]

http://blogs.consumerreports.org/health/2010/02/will-healthcare-reform-raise-my-taxes.html



Will health-care reform raise my taxes?

Not unless you are very affluent. The President***8217;s proposal to combine the House and Senate bills would expand access to quality reliable coverage and help tens of millions of Americans pay for it. To do that, it levies some new taxes, but very few people would actually have to pay them.

Income and payroll taxes: The President***8217;s plan follows the Senate***8217;s lead, and includes a 0.9 percent Medicare payroll tax on income over $250,000 for families, and $200,000 for individuals. Each of us pay this tax already, it***8217;s the deduction on your paycheck under the heading "medicare tax." The proposal would increase this tax for these high earners from 1.45 percent to 2.55 percent, but only on the amount of income over the $200,000 or $250,000 threshold. So a family bringing in $300,000 a year, would pay roughly $450 more a year in Medicare taxes***8212;about 0.15 percent of their income, or less than two tenths of a percent.

The president***8217;s plan also includes a new tax on what***8217;s called "unearned income." Right now income from things like interest earned, dividends, annuities, royalties, and rents is usually not subject to Medicare taxes. The President***8217;s proposal would make these sources of income subject to a 2.9 percent tax, but only for single taxpayers earning more than $200,000 alone, or joint filers earning more $250,000.

The Obama proposal eliminates the House plan to pay for reform primarily from a 5.4 percent tax surcharge on income over $500,000 a year for individuals, and $1 million for couples***8212;the so-called millionaire***8217;s tax.

Excise tax on high cost plans: The primary revenue component of the Senate and White House plans is a tax on expensive health care plans, sometimes referred to as "Cadillac plans." Most Americans get their insurance through their employers, which pay on average about 83 percent of the premiums, and somewhat less than that for family coverage. You likely don***8217;t even know how much that portion is, but it***8217;s part of your compensation and it***8217;s protected from income tax. The rest of your premium is usually deducted from your paycheck.

The President***8217;s proposal delays implementation of the tax and increases the threshold for plans to qualify for it. Under this proposal, the tax wouldn***8217;t take effect until 2018 and would apply only to plans with a total cost that exceeds $27,500 for a family or $10,200 for individuals (not counting vision and dental coverage). (For comparison***8217;s sake, in 2009 the average health insurance premium was $13,400 for a family and about $4,800 for an individual.)

The 40 percent tax would apply only to the portion of the premium above the tax threshold, and it would be paid by the insurers. So, after 2018, if you have a family plan that costs $30,000 a year, your insurer would pay a tax totaling 40 percent of the $2,500 beyond the threshold, roughly $1,000 per year. At least some of that expense would likely be passed on to you and your employer.

While the term "Cadillac plan" suggests that expensive plans are luxuries, that***8217;s not always the case. A plan may be more expensive because employees live in a part of the country with high health costs, or are older and more expensive to insure, or have inherently dangerous jobs such as firefighting or construction work. That***8217;s why the proposal would raise the "Cadillac tax" threshold another $1,850 for these categories of workers.

It***8217;s estimated that few families and individuals will have plans that would be taxed when it first takes effect in 2018. But the number who do qualify could grow over time because the cost of health care has been rising faster than general inflation. If the cost of health care slows, fewer insurance plans would be taxed.

And that is ultimately the idea behind the tax. One of the problems with our current health care system is that the uninsured and underinsured get too little care, while those who are fully covered sometimes get more care than they need (http://www.consumerreports.org/health/doctors-hospitals/medical-ripoffs/overview/medical-ripoffs-ov_1.htm)***8212;and sometimes more than what is good for them. (http://www.consumerreports.org/health/doctors-hospitals/hospital-care/aggressive-medical-care/overview/aggressive-medical-care-ov.htm) The excise tax would encourage employers to provide coverage designed to encourage more cost-effective treatments, which would help ease the rising cost of care.

As employers cut back on expensive plans to avoid the excise tax, they***8217;d transfer that part of your salary to wages. That means a bigger paycheck, on which, unlike the employer contribution to your health insurance, you pay income tax. That***8217;s by design, and it***8217;s largely how the Senate and White House plans would pay for health reform. The excise tax would raise only a small portion of its revenue by actually taxing benefits, and a much greater share as employers transfer compensation from nontaxable benefits to taxable wages.

Other taxes: There are a few other taxes included in the benefit that don***8217;t directly apply to consumers, but may be passed on to you in the form of slightly higher prices.

Over the next decade, the plan would charge drug companies $33 billion in fees, and device makers about $20 billion in excise taxes to help pay for the extra business they***8217;ll pick up selling their products to 30 million newly-insured Americans. Health insurers also stand to gain millions of new customers as a result of reform. Obama***8217;s proposal would raise revenues from these companies to the tune of about $67 billion over ten years.
Finally, if you frequent tanning salons, you***8217;ll pay a new 10 percent tax for exposing yourself to the risk of skin cancer (http://blogs.consumerreports.org/health/2009/08/tanning-beds-increase-cancer-risk-skin-damage-sunbed-dangers-melanoma-sunscreen-ratings-sunscreens-s.html).
***8212;Kevin McCarthy, associate editor

[Destroyer]

Franco, great post
Unfortunately that's an opinion, not facts, written by a blogger (Mr. McCarthy), about his take on the health care bill. Truthfully, since I have not read all 2000 pages of the bill, I cannot, for the most part, say where what he says is truth, fiction, or something in between. I can say with certainty that his last sentences on the tanning booth tax are factual, (since I just read that part of the bill this afternoon).

It's true, everytime you go to a tanning booth you're now going to be charged an additional 10% of the total bill as a "tanning tax" for exposing yourself to the possibilities of getting skin cancer sometime in the future. It's just another new tax hiding under the disguise of "making people pay for their fair share" I wonder what's going to be next.. a users tax when you go to the beach? (Because after all, you get a tan there also...so you should have to pay for exposing yourself to skin cancer there as well) They are going to tax you in ways you haven't even contemplated yet, all under the guises of "protecting you" and "it's for your own good".

But his opinion that over the next decade, the drug companies and medical device makers will need to be taxed to help pay for the extra business they’ll pick up, selling their products to 30 million newly-insured Americans, is nothing short of pure rubbish. (And more than a little confusing). WHY will the drug and device companies need to pay new taxes if they get new customers and HOW will new taxes "help pay" for new customers? What's the matter with the taxes they are already paying? (Oh, don't worry, there will be new taxes all right, since the government wants and needs the billlions of dollars in new revenue). Just remember CORPORATIONS DO NOT PAY TAX!!!!..they simply increase the price of their goods to the consumer by the amount of the additional tax. It is we, the consumers, that pay any new tax on a business. This notion that there will suddenly appear 30 million new customers is complete garbage. It's estimated that only 27 million people are without health insurance in the US right now, and over 60% of them are without insurance willingly. So where are those 30 million people going to come from? That's implying that 30 million people right now do not buy drugs or medical devices. Which of course is complete rubbish. No one in the US is denied health care right now, no one is denied drugs or medical devices BY LAW. So where do they get that 30 million new people figure from? It's smoke and mirrors.

Mr. McCarthy also states that health insurers also stand to gain millions of new customers as a result of reform. Again, that's pure Obama propaganda bullsh_t. Obama has stated in both his books and publicly when he was a Senator that he favors a single provider health care plan.. In other words, he wants the US government to be your health care provider.... and everything he has done so far is working towards the goal of putting all the private insurers out of business.

The health care bill will NOT raise revenues from these companies to the tune of about $67 billion over ten years....in fact it will destroy them. Several companies have already told their employees that they will not be providing them with private health care coverage starting in 2012.. the most notable one being McDonalds. They are moving their employees into the public health care program. As time goes forward, you'll see more and more of that happening as companies seek to avoid the additional taxes that are being placed on them for the private insurance they are providing to their employees. And as that happens, the small private insurance companies will, one by one, go out of business.

My opinion is that Mr. McCarthy's opinions are biased, nonfactual and should be taken with a grain of salt. He's simply touting the far left party line. :cen:

[Road King Cole]

Note to self:

"please refrain from shopping at Macy's next year".

[Destroyer]

Just a quick note to everyone:

Although I'm sure that we all are passionate in our opinions and beliefs, please remember that this is a discussion, a forum for ideas, not a fight. Nothing that is said here should ever be thought of as trying to hurt or anger anyone. :beer:

[RWilson2526]

Note to self:

"please refrain from shopping at Macy's next year".


Dont fear RKC you wont be seein anything bad in Macy's window next year because those guys couldnt be more wrong on this one.

[spareparts]

Just met with my tax guy over the weekend. I asked him about the inclusion of insurance as part of you reported income. Gues what, he showed the clause to me in writing in the federal tax change for 2010 book. Its a fact, for 2010 taxes, comapny provided insurance will be taxed as income. He said there are several issues that still arn't finialized, he has a IRS school to attend later in the year to address these issues. Sounds like they are expecting some changes. I have differing opinions on this subject as I pay for my insurance and the insurance for my children out of pocket. Its the biggest single payment out of my pocket each month, it excededs my house payment by a large margin. Luckily, my wifes company pays for her insurance, if they didn't, my premiums would double just to include here. Its great that company's provide insurance, but i see it as a way for compensating without taxes. We all complain about the big wheel execitives getting all those percs and compensations that aren't taxed. kinda falls in the same catagory to me. Regarless of what comes out of this, we are preparing to pay more taxes for 2010. I'd rather be proven wrong and get money back than be right and pay more.

BTW, the biggest issue surounding the new tax lay that got my attention was when I made the comment that I couldn't believe the unions would vote in someone who taxed their benefits, he replyed "Some Unions benefits are exempt" he didn't tell me which ones, but I'm guessing UAW leads the way

[jeffmo]

if unions are exempt i haven't heard about it from the IAFF.
here's what i found when i looked it up.not saying snopes or any of the other articles are the gospel,just what i've found.


http://www.snopes.com/politics/taxes/HR3590.asp

http://www.factcheck.org/2010/05/health-care-law-and-w-2-forms/

http://politifact.com/truth-o-meter/statements/2010/jun/10/chain-email/w-2-tax-forms-hr-3590-health-insurance-pay-taxes/

[spareparts]

He didn't say all unions, just some of them. Sounds pretty fishy to me. Tax some of the people, but not all of them? The book he showed me was printed by the IRS. I don't think any of this is in concrete. He said he was fully expecting revisions and updates all the way till the end of the year, we'll see what happens next year at tax time.

[jeffmo]

i think the healthcare bill will be tweaked before it's finalized.

[reelapeelin]

Does anybody here believe the D.C. cops and the American military would fire on American citizens if enough of us clogged the streets of D.C. as has recently happened in Egypt?...BTW, I commend the Egyptian military for keeping their cool...so far.

Not just Obamacare, but all the incredibly wasteful directions our money is sent is the real problem...Obamacare is only one spoke of the wheel...the status-quo of the present political scene (left & right) is the REAL problem...

[RidgeRunner]

The tax tables just arrived. Average working class man gets $10 to $12 per week less in his take-home pay. Average meaning someone making between $28k and 36k per year. Federal Withholding just went up. That will hurt some more than others. Still nothing concrete about Obamacare for the business.. The CPA drilled us about who has coverage and who does not. My guess is the IRS is taking a survey, again...
Just saw Congress talking about the Constitutionality of Obamacare last evening. One elderly gentleman on the panel said, "If the guberment is forcing all people to pay for Health Care, that is Not Unconstitutional." -- WTF HUH?

[RWilson2526]

Spare if you see your accountant again see if you can get the name of the publication he showed you. I think somebody is misreading something somewhere...this is directly fom IRS.Gov

http://www.irs.gov/newsroom/article/0,,id=228881,00.html

IRS Releases Draft W-2 Form for 2011; Announces Relief for Employers

IR-2010-103, Oct. 12, 2010

WASHINGTON — The IRS today issued a draft Form W-2 (http://www.irs.gov/pub/irs-utl/draft_w-2.pdf) for 2011, which employers use to report wages and employee tax withholding. The IRS also announced that it will defer the new requirement for employers (http://www.irs.gov/pub/irs-drop/n-2010-69.pdf) to report the cost of coverage under an employer-sponsored group health plan, making that reporting by employers optional in 2011.
The draft Form W-2 includes the codes that employers may use to report the cost of coverage under an employer-sponsored group health plan. The Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement. The IRS will be publishing guidance on the new requirement later this year.
Although reporting the cost of coverage will be optional with respect to 2011, the IRS continues to stress that the amounts reportable are not taxable. Included in the Affordable Care Act (http://www.irs.gov/newsroom/article/0,,id=220809,00.html) passed by Congress in March, the new reporting requirement is intended to be informational only, and to provide employees with greater transparency into overall health care costs.

Subscribe to IRS Newswire (http://www.irs.gov/newsroom/content/0,,id=105771,00.html)

[reelapeelin]

Does anybody here believe the D.C. cops and the American military would fire on American citizens if enough of us clogged the streets of D.C. as has recently happened in Egypt?...BTW, I commend the Egyptian military for keeping their cool...so far.

Not just Obamacare, but all the incredibly wasteful directions our money is sent is the real problem...Obamacare is only one spoke of the wheel...the status-quo of the present political scene (left & right) is the REAL problem...


Perhaps I jumped ahead a bit...:beer:

[Destroyer]

Does anybody here believe the D.C. cops and the American military would fire on American citizens if enough of us clogged the streets of D.C. as has recently happened in Egypt?...BTW, I commend the Egyptian military for keeping their cool...so far.


Interesting question. I seem to recall back in the sixties a small college campus where they were holding demonstrations against the Vietnam war. The National Guard was called in to "maintain order". It was called Kent State. They shot and killed 6 people.