Archives For Healthcare

Yesterday, President Obama did an interview with comedian Zach Galifianakis, on his show “Between Two Ferns,” where he tried to rally some much-needed support for Healthcare.gov. Surprisingly, the awkward interview video has become the number one site driving traffic to Healthcare.gov.

President Obama seems to be doing whatever he can these days to help muster support for his party ahead of the midterm elections. Unfortunately, Republican David Jolly won a closely watched U.S. House special election in Florida last night. Though Jolly was short on money, groups pooled money into one of the most expensive House races ever to hammer the ineffectiveness of the Affordable Care Act (ObamaCare) into voters’ minds for the win. Continue Reading…

Interestingly, the United States government’s federal taxing and spending, as percentage of the country’s GDP, has been nearly similar in the last four decades, as seen in the two graphs below. Continue Reading…

Beginning Jan. 1, 2014 the Affordable Care Act (ACA) will come into full effect. While parts of the law are already in place, 2014 will bring in a whole new set of changes, including dozens of tax provisions, that can be difficult to understand. Thanks to the folks at Block Talk, we’re posting a series of infographics that make it easier to understand the 1,000-plus page ACA.

Below you’ll find a graphic summary of the healthcare exchange programs including how your state is handling them and where to go for more information.

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Beginning Jan. 2014 all Americans will be required to enroll in a healthcare plan that maintains minimum essential coverage or pay a penalty (legally defined as a tax given the Supreme Court’s ruling). To offset the financial burden of maintaining coverage, the Patient Protection and Affordable Care Act (PPACA) provides tax subsidies – the premium assistance subsidy and cost-sharing subsidy – to qualifying individuals and families at or below 400% of the federal poverty level (FPL). It also extends Medicaid coverage to individuals and families at or below 138% of the FPL, up from 100%.

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Beginning Jan. 1, 2014 the Affordable Care Act (ACA) will come into full effect. While parts of the law are already in place, 2014 will bring in a whole new set of changes, including dozens of tax provisions, that can be difficult to understand. Thanks to the folks at Block Talk, we’re posting a series of infographics that make it easier to understand the 1,000-plus page ACA.

Below you’ll find a graphic summary of changes to Medicare D, the government’s prescription drug benefit program. This infographic explains the coverage gap closure, which became effective in 2011:

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Beginning Jan. 1, 2014 the Affordable Care Act (ACA) will come into full effect. While parts of the law are already in place, 2014 will bring in a whole new set of changes, including dozens of tax provisions, that can be difficult to understand. Among them is the requirement for minimum essential coverage, which mandates individuals maintain an approved health insurance plan or face a penalty – the greater of 1% of household income or $95 per household member.

Thanks to the folks at Block Talk, we’re going to post a series of infographics that make it easier to understand the 1,000-plus page ACA. Read close! Most of these provisions don’t apply to everyone:

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Tax-related issues took center stage in 2012. Between the drawn-out fiscal cliff negotiations, Romney’s 47% comment, the persistence of the Occupy movement, updated rules from the IRS and the presidential election, there was no shortage of tax talk. The talk becomes reality for Americans tomorrow (Jan. 30, 2013), when the IRS officially begins the 2012 tax filing season. In this post, we outline the highlights, predictions, changes, opinions and other worthy information on the 2012 tax filing season.

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In 2013 some wealthy earners will be subject to a new medicare tax (see Infographic); no, this isn’t the medicare payroll tax (although that too will also increase for some earners), rather it is an additional 3.8% tax applied to Net Investment Income for wealthy earners. To be subject, US earners must have an Adjusted Gross Income of $200,000 for individuals or $250,000 for couples filing jointly. Additionally, they must have some form of unearned income from investments in which they are passively involved, meaning they do not have material participation in the activity. This net investment Income can include earnings from property sales, rents, estates and trusts, annuities, stocks, bonds and more. With the changes, anyone who might be subject to the tax (which, by the way, is less than 4% of Americans), should seek a financial advisor immediately to plan for 2013 and beyond.

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The Supreme Court ruling on the constitutionality of the health care act, known as the Patient Protection and Affordable Care Act of 2010 if you’re into formal titles or Obamacare if you’re a bit more casual with legislative nomenclature, continues to reverberate.

The high court’s split decision stating that the individual mandate is OK, but states can’t be forced to participate in the health care law’s expanded Medicaid program is causing problems for some states on both political and financial fronts.

The Medicaid expansion is expected to extend coverage to roughly 15 million low-income people. But that number will be lower if states opt out of the expansion.

Two states at the forefront of the opposition are Texas and Florida, whose governors have already announced their non-participation plans. So have the leaders of Louisiana, Mississippi, South Carolina and Wisconsin.

Both Rick Perry (Texas) and Rick Scott (Florida) are adamant that although Uncle Sam initially will pick up the full Medicaid expansion tab, as the program costs transition to the states it will take billions from each state’s bottom line.

However, many hospitals and medical associations disagree with the governors. Texas and Florida are two states that rely heavily on property taxes and county leaders are worried because they don’t have an individual income tax.

In Texas, several local leaders, health policy analysts and officials at urban hospitals across the state say that Perry’s rejection of federal billions in Medicaid expansion would hurt county taxpayers and the hospitals they support, forcing them to continue to pick up much of the tab for treatment of the uninsured.

Compounding the local tax collectors’ fears is a recent report from the Rockefeller Institute of Government that found local governments and school districts nationwide already are facing “a serious fiscal crunch accelerated by weakness in property tax collections.

The public policy research arm of the University at Albany, N.Y., says that local property taxes declined by 0.9 percent in nominal terms in the first quarter of 2012, after two consecutive quarters of growth.

But when adjusted for inflation, local property taxes actually declined by 2.8 percent in the first quarter of 2012, marking the sixth consecutive quarterly decline in real collections, according to the report.  It is particularly acute in states that have experienced the largest declines in housing prices. Florida is one of those states with a hard hit housing sector.

Will the anti-Obamacare governors hold firm? Will the economy pick up enough at all levels to help counties replenish their accounts?

Since the Medicaid provisions, as well as the associated health exchanges, don’t kick in until 2014, states could change their minds. And some governors are waiting until after Nov. 6 to decide since a change in the White House will mean a change in the health care law.

If Obama is reelected and his signature piece of legislation goes forward, when the feds start doling out billions to bring more Americans into the Medicaid program, Perry, Scott and the other opposing state leaders will likely be on board.

Governors, regardless of their political affiliation, are like the rest of us. We all find it awfully hard to turn down money.

JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.

The Affordable Care Act has been given the go-ahead by the Supreme Court on Thursday. This act requires U.S. citizens to obtain health insurance or pay a tax. The act will not be instituted until 2014, however, wealthy taxpayers may start feeling the burden in 2013 when they start paying a higher Medicare tax to help cover costs. If you do not have health insurance by 2014, expect to be paying the IRS at a higher rate.

“The government can’t force you to buy insurance, but it can tax you for not buying it,” said John Roth, senior tax analyst with CCH Group.

When filing your income tax returns in 2014, you are most likely going to see a line asking for proof of health insurance. If you fail to properly prove your coverage, the government has the power to penalize you at a certain extent. The IRS cannot put a lien on your house, but they can take away some of your refund or credit. For single people, the penalties start at $95 or 1% of your income (whatever is higher) and by 2016, it rises to $695. For families, the penalties have not been set but will be higher than those filing as single.

The idea of the Affordable Care Act is to encourage people to get health insurance. This will ensure that when accidents or emergencies occur, uncovered costs on the system will not occur. It will also enable low-income individuals and families to be covered by wealthier individuals and families. To compensate for the lower income bracket receiving healthcare, individuals and families who make $200,000 or $250,000 or more, respectively, will have to pay an extra 0.9% on earned income and 3.8% Medicare tax on investment gains (interest, dividends, capital gains, rental income, and annuity income).

“In the case of a married couple with a joint income of $225,000 and $25,000 in capital gains, there would be no extra 3.8 percent tax. But if they had $35,000 in capital gains, their $260,000 in income would meet the threshold and $10,000 would be subject to the extra tax,” said Tim Steffen, Robert W. Baird & Co.’s director of financial planning.

Just one final note – starting in 2013, in order to deduct medical costs on your income tax return, they must amount to 10% of your adjusted gross income. This is fairly difficult, so if you were planning on getting Lasik eye surgery or laser hair removal, think about doing it in 2012 where the deduction is 7.5% of your adjusted gross income.

JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.