Health Care Provisions Explained
January 19, 2011 | 
Subscribe to our RSS Feed
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
2011 Tax Deadlines and MD Changes
January 6, 2011 | Subscribe to our RSS Feed
There are some important changes and deadlines affecting the 3.5 million taxpayers working on their 2010 income tax returns you should be aware of:
- Filing deadline is April 18th, 2011, not April 15th. Due to the celebration of Emancipation Day by Washington DC on April 15, 2011, personal income tax returns are due the following Monday.
- Splitting your Direct Deposit. This year, you can deposit portions of your refund into multiple accounts by using Form 588.
- Local Tax Rate Increase. For the tax year 2011, Baltimore City has increased the local tax rate to 3.20%
- Increased Pension Exclusion. This year, Maryland’s maximum pension exclusion (available to qualifying tax payers 65 or older), increased from $24,500 to $26,000.
These are just a few. Make sure you consult with your tax advisor and are aware of 2011 deadlines and changes.
Questions?
2010 Last Minute Tax Savings
December 27, 2010 | Subscribe to our RSS Feed
Business owners, there are still a few things you can do before the end of the year to impact your 2010 tax bill. Check out the links below- you might qualify for some substantial savings.
Research and Development Credits
Single Member LLCs taxed as S Corporations
2010 Tax Tips Series- Small Business Jobs Act
December 22, 2010 | Subscribe to our RSS Feed
Tax Tips and Planning for 2010 finishes with its fourth installment. Tax Partner Steve Albert discusses the new Small Business Jobs Act, highlights some of the key provisions and identifies ways you and your business could benefit.
The purpose of the Small Business Jobs Act is to help employers save tax dollars to invest back in their business. Some of the provisions are complex, and the video below will explain a few of them. Click here for a detailed breakdown of the SBJA from the IRS.
Questions?
steven.albert@glassjacobson.com