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Health Care Reform?

Tax Hikes are on the Way. . .

Unfortunately HR3590 is a centipede with lots of feet!!!

My Favorite movie line ever. . .

“And here we go…”

*****

This is part of the new Health Care Bill.

I contacted my Congressman about House bill HR3590 the health care bill that recently passed. I asked for a summary of changes.  The aid directed me to go to www: thomas.gov ; enter HR3590 in the search Box and look for summaries {you’ll need to select ‘Bill Number’ before ‘enter’}.   

Starting in 2011 your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter that it is a private concern or governmental body of some sort. 

If you’re retired?   So what?!  Your gross will go up by the amount of insurance you get.  (for *working* military retirees, that’s company benni’s PLUS Tricare)

You will be required to pay taxes on a larger sum of money that you have never seen. You benefited from it but never saw it.

Take your tax form you just finished and see what $15,000 to $20,000 additional gross does to your tax debt. That will give you a good “guess” what you’ll pay next year.  For many it also puts you into a new higher bracket so it will be worse for those folks.

This is how the government is going to buy insurance for those 15% that don’t have insurance and it’s only part of the tax increases.

Not believing this I researched the summaries and here’s what I’m reading:

On page 25 of 29 :

TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS <link, read it here> -(sec … 9001, as modified by sec. 10901)
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 employees gross income.”  (taxed at up to 40% by the way) 

Joan Pryde is the senior tax editor for the Kiplinger letter. Go to Kiplinger and read the 13 tax changes that could affect you.

 Number 3 is what I just told you about.

Why am I telling you this? 

“This is going to leave a mark!!”

© 2010, Bruce McFarland. All rights reserved.

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4 Comments

  1. Angela K Nuter's Gravatar Angela K Nuter
    June 16, 2010    

    I read the Kiplinger’s 13 tax changes that could affect you and you are dead wrong. It clearly states in regards to #3 that the income reported by your employer is not considered taxable income. Furthermore, if you read the provision carefully, no where does it state a tax amount of up to 40% as you state, or that the reported “sponsored health care” is taxable. It simply states they are required to report it. If it doesn’t get applied to box 1 on your W-2 as income, it is not taxable income and the provision even states that it is EXCLUDABLE (meaning not included) from the employees gross income. See here: “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 employees gross income.” Did you even read it? You need to get your facts straight before you publish!

  2. June 16, 2010    

    Thank you.

  3. June 28, 2010    

    Amazingly, I have read this word for word from another reader. Aside from asking that you form your own verbage, Thank you for pointing this out.

  4. July 9, 2010    

    Title IX: Revenue Provisions – Subtitle A: Revenue Offset Provisions – (Sec. 9001, as modified by section 10901) Amends the Internal Revenue Code to impose an excise tax of 40% of the excess benefit from certain high cost employer-sponsored health coverage. Deems any amount which exceeds payment of $8,500 for an employee self-only coverage plan and $23,000 for employees with other than self-only coverage (family plans) as an excess benefit. Increases such amounts for certain retirees and employees who are engaged in high-risk professions (e.g., law enforcement officers, emergency medical first responders, or longshore workers). Imposes a penalty on employers and coverage providers for failure to calculate the proper amount of an excess benefit.

    (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).

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