Health Care Provisions Explained
January 19, 2011 | 
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In March 2010, President Obama signed two bills into law that comprise the Health Care Legislation. Provisions of these two bills will be phased in over several years. We explain the provisions of the Health Care bill, and what it means for your small business, year by year:
2010:
- An available tax credit, up to 35%, for employers with less that 25 FTEs with average annual wages less than $50,000 for offering health benefits.
- Health care coverage extended to dependant children under age 27.
- 10% indoor tanning tax.
- $250 will be paid to qualified Medicare participants to help with the Part D coverage gap.
- The adoption credit is made refundable and increased by $1,000.
- A High-Risk pool for people with pre-existing medical conditions is established.
- Group and individual plans are prohibited from placing lifetime dollar limits on coverage
- Insurers are prohibited from rescinding coverage except in cases of fraud.
2011:
- W-2s must include the cost of employer sponsored health coverage
- Over-the-counter drugs are no longer qualified HSA or MSA expenses. They no longer qualify for reimbursement from an FSA or HRA.
- The penalty on nonqualifying HAS or MSA distributions is increased to 20%.
- Creation of Simple Cafeteria Plan for small businesses.
- Available grants for small employers who establish wellness programs.
- Nutritional content must be disclosed on food vending machines and at chain restaurants.
- Launch of The Community Living Assistance Services and Supports (CLASS) program.
- Higher Part D premiums begin for those with incomes over $85,000 ($170,000 for couples).
2012:
- Corporate information reporting will be required. Businesses that pay more than $600 a year to corporate providers of property and service must file a 1099.
2013:
- The threshold for claiming medical deductions on Schedule A is increased from 7.5% to 10% for those under 65. IN 2016 the 10% hurdle is extended to those ages 65 and older.
- Elimination of the employer deduction for Part D.
- A 2.3% tax on sales by medical device manufacturers and importers.
- The Hospital Tax is increased by 0.9 percentage points on earnings over $200,000 ($250,000 for joint filers).
- A surtax on unearned income of 3.8% is applied to net investment income on those taxpayers with Modified Adjusted Gross Income in excess of $200,000 ($250,000 for joint filers). Investment income includes interest, dividends, annuities, rents and royalties but not tax-exempt income.
- $2,500 limit on FSA..
2014:
- A penalty imposed on those remaining uninsured.
- Low-income tax credits will be available for those participating in health exchanges.
- Employer Play or Pay begins. Employers who had at least 50 full time employees in the previous year must offer certain coverage or pay a penalty.
2018:
- An excise tax imposed on high-cost employer-sponsored health plans (Cadillac plans).
Questions?
1099s for Rental Property Expenses
January 17, 2011 | Subscribe to our RSS Feed
If you own a rental property- the treatment of a rental as a business for 1099 reporting requirements (and therefore the need to file 1099’s for business related payments) begins in 2011. That is, payments made in conjunction with a rental property made in 2011 will be treated as payments made from a trade or business for 1099 purposes. The first 1099’s will be issued in 2012 for payments made during 2011.
This includes payments to management companies and for handyman types of services. You could be issuing a lot of 1099s.
Don’t wait until 2012 to start thinking about this if you have a rental property. Better to get the required info at the time of the services than after the fact, and set up your accounting software to track these payments to vendors early this year.
There are no reporting requirements in 2011 for payments made in 2010.
Questions?
harvey.finkelstein@glassjacobson.com
4th Quarter 2010 Investment Update
January 14, 2011 | Subscribe to our RSS Feed
Many of us find it hard to follow a sensible diet or a sensible investment strategy 100% of the time. If you must stray when managing your wealth or well-being, moderation is key. Chocolate cake is OK, as long as it’s not for dinner every night. Speculating on a stock or two is all right as well, as long as you don’t do it with your investment capital.
As we embark on a new year, our 4th Quarter 2010 Update includes ten investment-related resolutions that will hopefully result in better long term wealth.
Questions?
jon.dinkins@glassjacobsonIA.com