Larry, I contacted my Congressman about House Bill 3590, the Health Care bill and asked for a summary of changes. The Aid directed me to go to http://www.thomas.gov/, enter "HR 3590" in the search box and look for "CRS Summaries."
Starting in 2011—next year—the W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are provided.
It doesn't matter if you're retired; your gross income WILL go up by the amount of insurance your employer paid for. So you’ll be required to pay taxes on a larger sum of money than you actually received; take the tax form you just finished and see what $15,000.00 or $20,000.00 additional gross income does to your tax debt. That's what you'll pay next year. For many it puts you into a much higher bracket. This is how the government is going to buy insurance for fifteen (15) percent that don't have insurance and it's only part of the tax increases, but it's not really a "tax increase" as such, it is a redefinition of your taxable income.
Not believing this I researched the CRS Summary and here's what found:
Title IX Revenue Provisions—Subtitle A: Revenue Offset
"(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 executable from the employee's gross income (excluding the value of contributions to flexible spending arrangements)."
Joan Pryde is the Senior Tax Editor for the Kiplinger Letters. Go to Kiplinger's and read about the thirteen (13) tax changes for 2010 that could affect you.
Why am I sending you this? The same reason 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. So vote intelligently, based on your values. But also adjust your tax withholding, or increase your savings, so that you aren't surprised and put in a jam when your federal income taxes are due on April 15, 2012.
Larry, Do you agree with this assessment?
James
James, Incorrect. Including the health insurance on the W-2 is correct but this is just for informational purposes only. You do not have to gross up into income… YET.
Larry Kopsa CPA
