13 Upcoming Tax Changes

[kaneohe]

Based on this Tax Policy Under President Bush | Chris Edwards | Cato Institute: Daily Commentary
wouldn't you add 3% to the 4 top brackets (actually the highest bracket would add 4.6%). Also you'd have to take into account the favorable rates on CG and Qual Div would disappear. Probably other stuff too.

 

[FIREd]

Thanks Meierlde and kaneohe.

I used the following tax rates: 15%, 28%, 31% and 36%. I used the 2010 income cutoffs for MFJ and I also corrected for higher rates on qualified dividends and LTCG. Ouch! We are looking at a nice cut in take home pay starting in January 2011. And I probably failed to take into account a few more things that could boost our tax liability even more like the return of the marriage penalty next year. The party is definitely over.

 

[hogwild]

There doesn't seem to be much concern over #3:
"3. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011."

It doesn't say this would only apply to "Cadillac" plans. Let's say your plan is worth $12,000 which is probably a conservative estimate. And let's say you are in the 25% bracket. If this is included, on your W2, wouldn't that mean a $3,000 higher tax bill?

 

[W2R]

There doesn't seem to be much concern over #3:
"3. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011."

It doesn't say this would only apply to "Cadillac" plans. Let's say your plan is worth $12,000 which is probably a conservative estimate. And let's say you are in the 25% bracket. If this is included, on your W2, wouldn't that mean a $3,000 higher tax bill?

I just assume that it means there will be an additional box on the W-2 for health plan value. For example, right now there is a box for state taxes withheld, another for social security wage, and so on. None of these are added into the box for your income.

 

[kyounge1956]

There doesn't seem to be much concern over #3:
"3. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011."

It doesn't say this would only apply to "Cadillac" plans. Let's say your plan is worth $12,000 which is probably a conservative estimate. And let's say you are in the 25% bracket. If this is included, on your W2, wouldn't that mean a $3,000 higher tax bill?

I understand #3 the same way you do, but my paycheck show a much lower amount for healthcare, less than $1000 per year, than your estimate. I don't know if that's the full cost of the coverage—if we as employees are only paying part of the premium, the hit could be as hard as you expect it to be. Also, I am single, and I don't know if employees with family members pay more.

 

[scrabbler1]

When I was working, my employer used to post the value on the paystub of all of its employer-paid benefits starting in 2004. I can see this information being transferred to a W-2 form, just as nearly everything else gets transferred anyway.

And kyounge1956, employees with spouse and/or kids on the policies will pay more for their group health insurance coverage than those covering only themselves.

 

[Alan]

When I was working, my employer used to post the value on the paystub of all of its employer-paid benefits starting in 2004. I can see this information being transferred to a W-2 form, just as nearly everything else gets transferred anyway.

DW's paystubs for the company she worked for always had the value of the benefits, including health care, listed. It was only a few years ago that the benefit from my company provided life insurance started to be a taxable sum, so it is certainly not setting a precedent for taxation of company benefits.