10 Questions if Current Health Care Legislation is Passed

The attorneys at Litter law firm give their suggested Top 10 questions employers should ask if the current health care bill is finalized. Here's a summary of their Top 10 Questions: 1. Do we have to provide health care benefits to our employees?

Answer: Yes, if you want to avoid paying a penalty.

2. Do we have to pay a penalty if our employees decide to drop out of the employer sponsored plan?

Answer: Yes, in certain circumstances.

3. Can we provide our employee’s health insurance through the health insurance exchange?

Answer: Initially, smaller employers would be able to offer health insurance through the exchange once the exchange becomes operational in 2013 under the House bill and in 2014 under the Senate bill. Larger employers may eventually be able to do so as well.

4. Do we have to change our benefit plan?

Answer: Yes, if it does not comply with certain new requirements.

5. What is a “Cadillac” plan?

Answer: If you offer a high-premium health insurance plan to your workers, you may be subject to a new excise tax on these so-called “Cadillac” plans.

To help pay for the cost of expanding health care coverage, the Senate bill would, beginning in 2013, impose a 40% excise tax on employment-based health plans whose premiums exceed $8,500 for singles and $23,000 for family plans, indexed for inflation plus 1%.

6. Will health insurance plans be taxed?

Answer: Yes, both the House and Senate bills would impose a new premium tax on group health plans to fund comparative effectiveness research. Annual fees on health insurers and device manufacturers may also be passed on to employers.

7. What is a medical loss ratio and why should employers care?

Answer: A medical loss ratio is the percentage of health insurance premium revenues that must be spent on clinical services and quality.

8. Can we change our retiree health benefits?

Answer: The House bill significantly restricts the ability of employers to change retiree health benefits, while the Senate bill does not.

9. What happens to Flexible Spending Accounts?

Answer: Employers who offer flexible spending accounts (FSAs) and workers who utilize them would face new contribution limits under both the House and Senate bills.

10. Will this reduce our health care costs?

Answer:The ultimate question for employers is whether or not the current health care legislation will, in fact, bend the cost-curve or, in other words, reduce employers’ ever-increasing health care costs. For employers grappling with the impact of rising health care costs in the competitive global economy, the answer is far from certain.

For more information on each question, you may visit the full article. (via CPA Trendlines)

Voluntary Disclosure of Foreign Bank Account Reports

In an attempt to garner voluntary compliance, the IRS is granting penalty abatement and agrees not to prosecute Taxpayers who voluntary disclose their offshore bank accounts by September 23, 2009. If you have (or had) foreign bank accounts, we can assist you with filing the correct forms so that you can take care of this matter. Foreign countries are disclosing more information to the United States than ever before, so we strongly encourage Taxpayers to take advantage of this opportunity. For more information, please take a look at the Internal Revenue website or contact us directly and we'll be happy to assist you.

Last minute filing info

If you're planning to mail your tax return today, be sure to check the office hours of your local post office at the USPS website. Don't have all of your information? Consider filing an extension, which automatically gives you an extra 6 months to file your return. But remember: an extension to file the return is not an extension to pay any tax due. For information about tax penalties for late payment, you can visit the FAQ section of our website.

If you are concerned about being able to pay tax due, consider these recommendations about payment, or a discussion of payment options from the IRS.

Double-check your return for these 9 common filing errors.

Breathe a sigh of relief when Tax Day 2009 is over!

7 Facts About Penalties

When facing a big tax bill, a mass of penalties can add insult to injury. It's important to know what the penalties are, and how to avoid them whenever possible. For a summary of penalties and how to avoid them, you can visit the FAQ on our website on how to avoid federal tax penalties. The IRS recently posted 7 Important Points About Penalties, the first of which may be the most important:

1. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return and explore other payment options in the meantime.
2. The penalty for filing late is usually 5 percent of the unpaid taxes for each month of part of a month that a return is late. This penalty will not exceed 25 percent of the taxpayer’s unpaid taxes.
3. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
4. You will not have to pay a failure-to-file penalty if you can show that you failed to file on time because of reasonable cause and not because of willful neglect.
5. You will have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid.
6. If you filed an extension and you paid at least 90 percent of your actual tax liability by the due date, you will not be faced with a failure-to-pay penalty.
7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.