The 1990-page health care bill that the House will consider has numerous tax provisions. Americans for Tax Reform published a list of some of the changes:
– Employer Mandate Excise Tax of 0 to 8% of wages (depends on size of business);
– Individual Mandate Surtax of 2.5%;
– Flexible Spending Accounts (FSAs) limited to $2500/year;
– Non-qualified HSA Distributions would be taxed at 20% versus 10% currently;
– Income tax surtax of 5.4% on Modified AGIs over $500,000 single/$1 million MFJ (margin loan interest is not deductible for purposes of this calculation);
– 2.5% excise tax on medical devices;
– 1099s would be required for corporations; and
– “Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related”.
These are just some of the tax changes in this measure.
It’s important to realize that this legislation will not be signed into law as currently drafted. It’s quite possible there will be no health care legislation passed (Americans are not in favor of the legislation), though I suspect something will be passed. Additionally, it is certain that if the Senate passes legislation it will be very different from the House bill.
This measure would lead to higher taxes on the wealthy. This would lead to more strategies by the wealthy to shelter income, which means more work for tax professionals. Additionally, the requirement that 1099s be issued to corporations would mean a lot more work for tax professionals. As I keep telling my brother, I’m convinced I have lifetime employment.
Tags: HealthCareLegislation