Election Day is just a week away and if you're anything like me, you want to shut off all your electronic devices.
No more phones flooded with recorded messages encouraging you to vote for (or against) someone or something.
No more television with its inane and infuriating candidate ads.
No more e-mail with all its election propaganda.
Even worse, not only is all this modern politicking annoying, some of it is also just plain wrong.
Take an e-mail that's been circulating about the new health care law. The message warns that you'll soon be paying added taxes on the value of your employer-provided health care coverage. Here's an excerpt:
Starting in 2011 (next year folks) your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private company or government body of some sort. If you're retired ... So what, your gross will go up by the amount of insurance you get.
The dollar value (cost of what the company pays for your insurance) will be considered income and added to your gross pay.
You will be taxed on the total. You will be required to pay taxes on a larger sum of money that you have never seen.
Now, I'm not calling this e-mail a scam, but it operates in much the same way that tax scams do. It contains a kernel of truth that it then twists it to suit its purposes. In this case, that appears to be an effort to panic people when it comes to health care in the hopes they'll vote against a candidate who supported health care reform.
The tiny true part of the e-mail is that every worker who has health through his or her workplace will eventually know the value of that coverage. And the amount will be reported on the worker's 2011 tax year W-2 form, sent out in 2012. This is the same form on which a worker's income and withholding taxes are reported.
But your company's portion of your insurance, which is a nontaxable fringe benefit to you, will still be a nontaxable benefit. The IRS isn't going to get a cent from you based on that amount.
The IRS does, however, want to know about companies' insurance costs for employees. And the easiest way to get that info is by using a reporting system, the annual W-2 forms employers send out, that's already in place.
Why is the IRS curious about what employers pay for employee medical insurance? Because another part of health care reform is the so-called Cadillac tax which will be assessed in 2018 on very expensive health care benefits that some employees receive.
That tax, though, will not be paid by the workers getting the high-dollar coverage at work. Nor will your boss pick up the tab. Rather, the Cadillac tax will be paid by the insurance companies.
And right now, it looks like the reporting requirement might even be delayed. The IRS has announced that the 2011 W-2 workplace health insurance information reporting will be optional.
The Treasury Department, which is the boss of the IRS, decided not to strictly enforce the new 2011 reporting requirement because many employers need more time to make changes to their payroll systems before they can comply with the new law.
Remember, though, regardless of when the reporting requirement takes effect, it won't cost you a penny more in taxes.
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