I thought that I would be able to leave this subject with a prior post on taxes but new information keeps coming out that I have to post about. With the passage of the healthcare bill all of a sudden information is coming out that will say things like ” 10 things that will affect your tax bill” or similar statements like that. So My question is: Why weren’t the 10 things that will affect my taxes told to me prior to the passage of this bill?? I will tell you why, because our government didn’t want us to know. We hear the sound bites of “coverage for 32 million people, no pre-existing conditions, no life time max on the coverage. Don’t get me wrong these are good things, but I believe the true cost to all of us was covered up and now we are beginning to hear what the cost will truly be.
I have linked to an article that says starting in 2011 that businesses will have to include the value of their employees health plan on the w 2!! Think about how much this will raise your tax bill?? I can’t get my withholding less than zero or contribute anymore to my 401k to lower my taxes so guess what?? A lot of us will be writing a big check to the government and this is how all this stuff will get paid for. This is why the government set it up to occur in the future so we would all forget about it and get wrapped up into what Tiger Woods, what somebody is doing in Hollywood or American Idol!! Like I said before about the passage of this bill that bothers me, is what will be done to all us when the bureaucrats start interpreting what has been passed by this Congress and signed by the President.
In the article, Health Care Reform: Tax Hikes on the Way, Joan Pryde lists 13 tax changes that could affect our tax bill:
“The new health care reform law is chock-full of new taxes and tax increases that will affect many individuals and businesses, but it will be years before most of these hikes take a bite out of your — or your company’s — wallet. The law also has tax breaks to help both individuals and small businesses pay for insurance.
Figuring out exactly what the new law’s impact will be on your finances will be tricky, not only because many of the effective dates are delayed, but also because the law signed by President Obama will most likely change very soon: After passing the Senate bill on March 21, the House also approved a package of modifications that the Senate plans to pass before the end of the month.
Take a look at what’s coming down the road, starting with provisions that take effect first:
1. A new 10% excise tax on indoor tanning services that takes effect for services provided after June 30, 2010.
2. Giving small firms tax credits as incentives to provide coverage, starting this year. Employers with 10 or fewer workers and average annual wages of less than $25,000 can receive a credit of up to 35% of their health premium costs each year through 2013. The credit is phased out for firms larger than that and disappears completely if a company has more than 25 employees or average annual wages of $50,000 or more. Beginning in 2014, small firms that sign up with one of the health exchanges to be created can receive a credit of up to 50% of their costs.
3. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011.
4. Elimination, after this year, of a deduction employers now take for providing Medicare Part D prescription drug coverage to their retirees to the extent that the federal government subsidizes the coverage. This will not take effect until 2013.
5. Doubling the penalty for nonqualified distributions from health savings accounts, to 20%, beginning in 2011.
6. A limit on the amount that employees can contribute to health care flexible spending accounts to $2,500 a year. Under the House package of changes, the cap won’t take effect until 2013.
7. A ban on using funds from flexible spending accounts, health reimbursement arrangements or health savings accounts for the cost of over-the-counter medications, starting in 2011.
8. Imposing a 0.9% Medicare surtax on wages of single taxpayers earning more than $200,000 a year and couples earning over $250,000, starting in 2013. In addition, the House’s package of modifications would levy a special 3.8% Medicare tax on the unearned income of those taxpayers. The House defines unearned income as interest, dividends, capital gains, annuities, royalties and rents. Tax-exempt interest would not be included, nor would income from retirement accounts.
9. A hike in the 7.5% floor on itemized deductions for medical expenses to 10%, beginning in 2013. But taxpayers age 65 and over are exempt from the cutback through 2016.
10. A new 40% excise tax, beginning in 2013, on high-cost health plans, defined as those providing coverage in excess of $8,500 for individuals and $23,000 for families. The House’s package of modifications includes higher threshold amounts and an initial effective date of 2018.
11. A new tax on individuals who don’t obtain adequate health coverage by 2014. The tax is be phased in over three years, starting at the greater of $95, or 0.5% of income, in 2014, and rising to the greater of $750, or 2% of income, in 2016. The House passed companion measure would modify this provision so that a person without coverage in 2014 would pay the greater of $95, or 1% of income, and in 2016 would pay the greater of $695, or 2.5% of income.
12. Providing a refundable tax credit, once the individual mandate takes effect in 2014, to help low-income folks purchase coverage. To be eligible, a person’s household income must be between 100% and 400% of the federal poverty level, generally around $11,000 to $44,000 for singles and $22,000 to $88,000 for families.
13. A nondeductible fee charged to businesses with 50 or more employees if the firms fail to offer adequate coverage. The fee will equal $750 times the number of workers in the firm, and is slated to go into effect in 2014. The House’s package of modifications would increase that fee to $2,000 times the number of employees, though it would not count the first 30 workers in that calculation.”1
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