Obamacare and taxes

[MtnMax/Magniac]

From Silvio Canto's blog - - -
May 16, 2013
Anger? Wait 'til people do their taxes next year?

Silvio Canto, Jr.

In about 9 months, Americans will come face to face with ObamaCare. It will happen when they sit down to fill out their tax returns. My guess is that most people will be angry.
ObamaCare and the IRS will work hand in hand in the implementation of the law, as Byron York points out today:
"A look at the text of the health care law reveals that much of it consists of amending the Internal Revenue Code to give the IRS more power. When Obamacare goes fully into effect in January, every American will have to prove to the IRS that he or she has "qualifying" health coverage, meaning coverage with a list of features approved by Health and Human Services Secretary Kathleen Sebelius. That will be done by submitting a document to the IRS, something like a W-2, to confirm coverage."
There is more. In simple language, the IRS will be the manager of the new law.
The IRS will ask you questions that you thought heretofore belonged in the very confidential relationship between doctors and patients.
The IRS will also need to hear about "raises" and changes in your financial condition.
Didn't a bunch of colonists throw tea in the harbor the last time that something like this happened?
The IRS and HHS will monitor the people through a "database," or a huge intrusion into your personal, financial and health information.
Again, my good guess is that most Democrats who voted for this monstrosity will shut off their phones next spring. They won't like what voters are telling them.
Many shocked Democrats will likely introduce bills in the US Senate to stop the implementation.
Others will blame their "staff" for not telling them everything that was in the bill.
Some will blame Bush for invading Iraq.
Some will insult our intelligence, like Mr Axelrod this morning:
"The government is simply too big for President Obama to keep track of all the wrongdoing taking place on his watch, his former senior adviser, David Axelrod, told MSNBC. "Part of being president is there's so much beneath you that you can't know because the government is so vast," he explained."
So let me get this straight. The government is too big for one man to keep track SO we want to make the government bigger SO that he has more trouble keeping up with it?
Welcome to the era of big government. This is what big government looks like. Now let the Democrats explain why this is better than what we had before.

 

[CrackerRican]

We're screwed !!!

 

[old timer]

We're fucked !!!!

From your mouth to Gods ear...:biglaugh:

 

[CrackerRican]

From your mouth to Gods ear...:biglaugh:

I know he's shaking his head at me. I try to be good but I mess up alot. I didn't mean to offend you

 

[Traumahawk]

I already had to pay additional taxes this year....in the past...what my employer pays for their portion of my healthcare...was not considered income...this year it was. It like gaining additional thousands in income...without any additional taxes paid out.

Also...the IRS has ALREADY proven that they will do what they think is right.....so what happens after this goes into effect and they have even more power?

 

[Tex85]

Not only are employer contributions being taxed on employee payroll but if anyone looked at December vs January pay stubs medicare went up as well. We can all thank the liberals for that one.

I'm just glad they fucked over a lot of their constituents with their new regulations on hourly workers further defining the difference between full and part time workers. Essentially a good portion of democrat supporters got their hours cut plus an increase in taxes. Should be a good lesson for them and make them think twice when voting next time.

Sent from my Nexus 4 using Tapatalk 2

 

[Itgoes]

I own a business and I'm pretty sure you are wrong on that. The employer contribution for health-care is reported on your W2 but is NOT taxable......you should look into it.

The Medicare increase is just a return to what it always was. Part of the stimulus package was a reduction put into place 2 years ago, it expired the end of 2012.

 

[Rusty McNeil]

I own a business and I'm pretty sure you are wrong on that. The employer contribution for health-care is reported on your W2 but is NOT taxable......you should look into it.

The Medicare increase is just a return to what it always was. Part of the stimulus package was a reduction put into place 2 years ago, it expired the end of 2012.

Some of the techs that I work alongside of here in California (They are a different company than me) are independent contract labor with "in lieu of benefits" pay on top of wages. They get around $17/hr for 52 weeks x. 40 hour week to buy benefits on their own instead of the company providing it, this is on top if thier regular rate.
They told me that in this last tax cycle they had to pay income tax on their in lieu of benefits pay.

I don't understand it either and am skeptical of it, but I do know there was talk of a tax on "luxury plans", maybe its some form of that?

 

[Itgoes]

Some of the techs that I work alongside of here in California (They are a different company than me) are independent contract labor with "in lieu of benefits" pay on top of wages. They get around $17/hr for 52 weeks x. 40 hour week to buy benefits on their own instead of the company providing it, this is on top if thier regular rate.
They told me that in this last tax cycle they had to pay income tax on their in lieu of benefits pay.

I don't understand it either and am skeptical of it, but I do know there was talk of a tax on "luxury plans", maybe its some form of that?

Not sure of the "in lieu of benefits" thing. I don't work directly with many contractors.

This is the story on the employer payed portion of health care benefits:

Starting in tax year 2011, the Affordable Care Act requires your employer to report the value of your health insurance coverage provided to you on your annual Form W-2. This reporting is for informational purposes only, to let you know the value of your health care benefits so you can be a more informed consumer. The amount reported does not affect your tax liability, as the value of your employer?s contribution to your health coverage will continue to be excluded from your income and it is not taxable.

I've seen both of the OP's claims repeated many places but they are just not true.

I know I'll get flamed for this, but that's the problem with getting news from outlets like Fox and many websites that are out there. They have an agenda and they do not give you all the information.

They'll tell you to check your pay stub because your taxes just went up.....but they won't mention it's because you just lost a tax cut that the current President gave you.

They say that your health benefit is now being reported as income on your W2......but they won't tell you that that portion is not taxable.

You really need to check everything out yourself now-a-days IMO.

 

[Rusty McNeil]

I agree with ITGOES findings for the most part.
I just did some "non news outlet" checking myself.

Also found that under Obama care in 2018 luxury plans WILL be taxable, luxury being defined by total premium amount. There's a dollar amount limit, one for individual and one for family.

That is the reason it said total insurance cost will start showing up on W2's

But That tax ability is a liability to the insurer though, not the employee.
The employee will not be taxed on their luxury health care plan. The employer or insurance company will be paying that.

In the case of self insured corporations (there are more than you'd think, most major corporations that have excellent cash flow I have worked for are self insured, the healthcare provider is simply there for management of the plan but total cost for the year is pay as you go and directly paid by the employer)
Either way I see it as a way that in the end either luxury plans will be done away with to reduce tax liability to the insurance company or employer or else the cost will ultimately find its way back to the end user.

On the cash in lieu of benefits thing I found that it has always been taxable income. but was recently clarified further and probably brought some companies into compliance.
IRS says any cash pay that's in the control of the employee is taxable income.

As for the Medicaid increase, that was always going to happen, it simply restored the tax to its original level.

It was originally a one year cut in the "vote for me get free shit" campaign of Obama, then it got a one year extension.
It never should have been cut in the first place since it is about the only tax we have that is regressive instead of progressive.

As for IRS penalty for not carrying any health insurance; .....that's a fact. ...........I don't know the details or amounts, have read alot of different numbers but I don't see how its enforceable without the IRS delving into areas of your life not previously looked at.

But how enforceable is it really?

If the IRS is handling it and a large number of people don't file returns at all how do they collect it on low income people that don't even file?

Another tax not mentioned is the medical appliance tax on appliance costing over $100
That one is in the law as well but I'm not sure whether its a tax on the end user or on the appliance provider.

Yet another one is a 0.9% increase on taxes for investment returns for income levels over $200,000

Obamacare will not be free

 

[Traumahawk]

I own a business and I'm pretty sure you are wrong on that. The employer contribution for health-care is reported on your W2 but is NOT taxable......you should look into it.

The Medicare increase is just a return to what it always was. Part of the stimulus package was a reduction put into place 2 years ago, it expired the end of 2012.

@ Itgoes....I stand corrected...it was 7296.62....and I was not taxed upon it. IT was section DD on the W-2. and NO...this didnt come from Fox news...it was a mistake on my own part.