Tax Help News: How Your Taxes and W-2 will Be Affected by New Health Care Law
I got an interesting email recently regarding the new health care law (see below for full email message) . The email FALSELY claims that the new legislation would require workers to pay income tax on the value of employer-provided health insurance. This is simply not the case.
It’s true that the value of employer-paid health insurance will be added to employees’ W-2 forms for information purposes, however, contrary to this widely circulating chain e-mail, it definitely will be considered taxable income.
There’s a great article on Snopes.com that talks about this further. Basically, H.R. 3590 imposes a 40% excise tax on the value of employer-sponsored medical insurance that exceeds a give threshold. This will be paid be the insurance company, not the employee and is initially expected to affect fewer than 10% of the families covered by health insurance
You can also go to factcheck.org and whiethouse.gov to learn more.
There is alot of confusion about the new health care law and the evolving tax code in general. What’s important to keep in mind is that there are still more tax hikes planned for 2010 intended to fund healthcare reform. So you want to get the facts and stay up to date on any legislative changes that could affect you. Also, if you have unfiled tax returns or owe back taxes to the IRS, you must be proactive and act now to resolve your IRS tax problems before you get mired in deeper trouble with these upcoming tax hikes. With the government desperate for revenue, the IRS collection efforts are becoming stricter and more aggressive.
If you need owe the IRS $15K or more in back taxes or have 3 or more years of unfiled tax returns, contact us today for a free, no-risk tax relief consultation at 1-866-IRS-PROBLEMS or visit www.taxresolution.com.
Here is the email that has been circulating and FALSELY claiming that the new health care law would require workers to pay tax on the value of employer-provided health insurance:
I contacted my Congressman about House Bill HR3590 the health care bill that just passed. I asked for a summary of changes. The aid directed me to go to www.thomas.gov <http://www.thomas.gov/> , enter HR3590 in the search box and look for CRS Summaries. Then scroll down to:
TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(Sec.9001, (as modified by sec.10901) Sec.9002.
Starting in 2011 (next year folks) your W2 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 if that’s a private company or government body of some sort. If you’re retired….So what, your gross will go up by the amount of insurance you get.
The dollar value (cost of what the company pays for your insurance) will be considered income and added to your gross pay. You will be taxed on the total.
You will be required to pay taxes on a larger sum of money that you have never seen.
Take your tax form you just finished and see what $15,000 or $20,000 of additional gross income does to your tax debt. That’s what you’ll pay next year. For many it also puts you into a higher tax bracket so it’s even worse.
This is how the government is going to buy insurance for 15% of the populace that doesn’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-(Sec.9001, (as modified by sec.10901) Sec.9002. “requires employers to include in the W2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income.”
Joan Pryde is the senior tax editor for the Kiplinger letters. Go to Kiplingers and read about 13 tax changes that could affect you. Number 3 is what I just told you about.
Why am I sending you this? I hope you forward this to every single person in your address book. People have the right to know the truth because an election is coming in November.
More Tax Help, IRS News and Tax Relief Tips:
- Top Tax Help Tips For Taxpayers Looking to Settle Tax Debt With an IRS Installment Agreement
- IRS Tax Relief For Last Minute Filers as April 15th Approaches
- It’s Not Too Late for Taxpayers with Unfiled Tax Returns to Resolve IRS Problems
- Tax Relief Options Available to Americans Who Fail to File Legally Required Tax Returns
- Settling IRS Tax Debt: What Taxpayers Don’t Know About Tax Resolution Could Hurt Them
Tags: 2010 tax hikes, Back Taxes, health care law, health care reform, health care taxes, HR 3590, Michael Rozbruch, tax resolution, taxes, unfiled tax returns
