Your Tax Question - 045 (Part C)

(Continued from Your Tax Question - 045 (Part B))

Proposed changes in the tax law for 2011

* W-2 Forms Must Include Health Insurance Costs - Many people mat think that this is for the purpose of taxing workers on this non-taxable benefit but the official word is so that workers may know exactly how much it actually costs to insure them.

* Over-The-Counter Medication No Longer Allowed For No-Tax Health Reimbursement Plans - All those plans that you were putting pre-tax dollars into to pay for health stuff. In 2011 you will no longer be reimbursed for medications that do not have a prescription. Oh, and in case you try the next change is for you.

* Increased Penalty Tax on Non-Qualifying HSA & Archer MSA Distributions - For HSA, the penalty is currently 10% but is raised to 20% and for Archer MSA the current penalty is 15% but is increased to 20%.

* Annual Fee on Drug Manufacturers & Importers - Ever wonder how Medicare Part B is going to be funded? Well, partly it will be funded by this tax on Branded Drug Manufacturers & Importers.

* Small Employers May Establish Cafeteria Plans - For small employers, there will be a 2 year moratorium from the nondiscrimination requirements and be allowed to establish a cafeteria style plan for its employees. For this allowance, an employer must have less than 101 employees average on either of the prior two years.

OK Byron, I think I have sufficiently beat this dead horse sufficiently. I could continue on about 2012, 2013, 2014, and on to 2018 with the proposed changes. However, after Congress regroups for the year who knows what may happen and when. Suffice it to say that this Health Care changes a lot of what we knew about the tax law and if not tempered will do so for years and years to come. For more information you can read about it at the IRS website.

I hope this information clarifies,

John