Issue link: http://www.e-digitaleditions.com/i/105134
Protection continued Employers who have 25 or less full-time insurance to employees. There is, however, a dichotomy employees, provide average compensation of between those employing 50 employees or more and those $50,000 or less, and pay at least half of the employing 49 employees or less.Those employing 50 or more, health insurance coverage, are eligible for a face penalties if their employees elect the government credits for their health insurance purchases. The penalty is $2,000 per tax credit. employee who elects the government credits; however,the first 30 employees who do so do not count against the company. Small businesses employing 49 employees or less are under no such penalties. Insurance Companies A special penalty applies to insurance companies and selfinsured companies if the premiums they charge exceed $10,200 per person, or $27,500 per family. The penalty is an excise tax of 40 percent of the excess premium charged. Medicare Taxpayers earning in excess of $250,000 (for families) or $200,000 (for individuals) will pay an additional 0.9 percent in Medicare taxes on their excess income. The law is effective in 2013. In addition to the above, a Medicare tax of 3.8 percent will now be applied to any net investment income that exceeds the $200,000 and $250,000 threshold. This includes income from the sale of a business. Dividends Income from dividends has seen its share of changes in the past 10 years. Once again, the dividend rate has been altered by means of the legislation. For those families making above $250,000, dividends will be subject to an additional 3.8 percent tax.This tax begins in 2012.To those who own closely held C Corporations, a review of their tax strategy is appropriate,especially if unpaid retained earnings are present.The current dividend tax rate is 15 percent. Interest While interest is taxable as ordinary income, there will be a 3.8 percent surcharge assessed to interest earnings for those families making over $250,000 per year, starting in 2012. Capital Gains Capital gains income has enjoyed favorable treatment for quite some time. Currently, capital gains are taxed at 0 percent for low income bracket payers and 15 percent for high tax bracket payers. For those making above $250,000,the tax rate will increase by an additional 3.8 percent, starting in 2012 as well. Credit for Small Businesses Employers who have 25 or less full-time employees, provide average compensation of $50,000 or less, and pay at least half of the health insurance coverage, are eligible for a tax credit. During tax years 2010, 2011, 2012 and 2013, employers will receive a 35 percent tax credit (in addition to a tax deduction for the premiums paid in excess of the tax credit). In 2014 and 2015, the tax credit increases to 50 percent. After 2013,the credit is only available for two more years and only if the insurance is purchased from an insurance exchange. On the other hand, if the employer has 10 or fewer employees, their average compensation must be less than $25,000 in order for the employer to qualify for the credit. Furthermore, their credit is 25 percent for 2010, 2011, 2012 and 2013. For 2014 and 2015, the credit increases to 35 percent. Medical Expenses Under the old law, individuals—if they itemized—could only deduct medical expenses in excess of 7.5 percent of their adjusted gross income. Effective January 1, 2013, the 34 FEDA New s & View s