Grandfathered Health Plans

Reversing course, the IRS amended regulations issued earlier the year to allow certain changes in coverage without the loss of grandfathered status under the Patient Protection and Affordable Care Act.  All group health plans may switch insurance companies and preserve their grandfathered status. The change is not retroactive.  The amendment applies to group health insurance changes which become effective on or after November 15, 2010.  Changes prior to this time will likely result in loss of grandfathered status.

This change can allow employers to maintain a group health plan's grandfathered status and avoid new requirements such as discrimination testing for group health plan (which was previously not required).  Many employers change insurance coverage for group health plans from year to year due to changes in premium costs and benefit levels.  Without this change in regulation, very few group health plans would have been able to maintain grandfathered status.

Comment on their report card..."Doesn't play well with others"

GOP Decision to Cancel White House Meeting Brings Talk of Gamesmanship - FoxNews.com

A significant meeting today between Congressional leaders and the President is postponed until November 30, 2010. Is this just business as usual? What's being held up by the inability of these leaders to meet? Just a few small things...

• Action on the Bush Tax cuts that are set to expire on December 31, 2010. That's right. They are going to meet for the first time 30 days before these tax cuts expire to work out a deal. Really?

• Action on tax extenders package. This includes the what seems like the every year extension of the alternative minimum tax exemption increase and popular tax credits like the research and experimentation credit. Failure to pass the extenders package will have a significant impact on middle class tax liabilities when they discover the increase in their alternative minimum tax liabilities.

It appears that most action on tax planning is going to have to wait until you have had your turkey dinner and started your holiday shopping. I am sure you will be excited to be spending additional time with your accountants in the holiday season.

Is there potential relief for all those 1099's?

The United States Senate Committee on Finance: Newsroom - Chairman's News

It looks like someone in Congress might actually understand that issuing millions of 1099's might not really improve compliance. The problem is who will be required to issue 1099's? Who will be considered a small business? How do you gather all the data needed to comply with whatever new filing requirements may be adopted? Does this really just avoid killing more trees?

More to come...

2010 year end tax planning

The Holidays are fast approaching and you know what that means …..

Time for Year-End Tax Planning

Tax planning for year-end 2010 brings with it many new challenges. With the anticipation of tax legislation that may be put to a vote in Congress before year’s end, recent changes in legislation and tax laws and the complicated context of effective dates for many tax planning incentives, it is important to stay on top of the game!

New legislation that has been passed includes the Patient Protection and Affordable Care (PPAC) Act. This was designed to effectuate fundamental reforms to the U.S health care system. The PPAC brings with it tax credits for employers providing health insurance to their employees, certain medical care tax benefits to children under the age of 27 and small employers cafeteria plans.

Congress also passed the Hiring Incentives Restore Employment (HIRE) Act which provides tax breaks for businesses to encourage hiring and imposes a number of potential burdens with respect to reporting and disclosure of foreign assets. The Small Business Act of 2010 was also passed by Congress and was designed to increase lending to small businesses and create incentives for small business investment.

As new laws take over others are set to expire. Unless Congress acts to extend favorable tax benefits provided under the Jobs and Growth Tax Relief Reconciliation Act of 2003, 2010 will offer some unique opportunities which will not be available next year.

This is the sales pitch...

DKB can help whip away the confusion of the changing tax scene.  With the significant changes in the tax law that have happened in 2010 and the expected changes that will happen in 2011 and after, planning is a must.  Don't miss opportunities that might not be there on January 1, 2011. 

White House Gives In On Bush Tax Cuts

White House Gives In On Bush Tax Cuts

This story in the Huffington Post is the first indication of what might happen with the expiring
Bush tax cuts. It looks like they may not be expiring. Who would have thought this would happen 6 months ago?

An indication from the President that current ordinary income and capital gains tax rates might be extended will lend some greater clarity to individual taxpayers 2010 year end planning issues. We have spent time wrestling with the idea of accelerating capital gains into 2010 to take advantage of the 15% long term capital gains rates. The wrestling may be over?

Small Business Health Care Tax Credit

The IRS has published questions and answers to help taxpayers to understand if they are eligible to claim the Small Employer Health Care Tax Credit.

Small employers that provide health care coverage to their employees and that meet certain requirements (“qualified employers”) generally are eligible for a federal income tax credit for health insurance premiums they pay for certain employees. In order to be a qualified employer, (1) the employer must have fewer than 25 full-time equivalent employees (“FTEs”) for the tax year, (2) the average annual wages of its employees for the year must be less than $50,000 per FTE, and (3) the employer must pay the premiums under a “qualifying arrangement”.

IRS Q&A's are at http://www.irs.gov/newsroom/article/0,,id=220839,00.html.  The IRS has also posted a video that provides a high level summary of the new credit at http://www.youtube.com/watch?v=85i1kzIG57k.