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Saturday, October 31, 2009

INCOME TAX PLANNING FOR MEDICAL EXPENSES


by JC Leahy
What a good deal!!! Pay your medical expenses AND save Federal income tax, AND save payroll taxes, AND save State income tax all at the same time!!! Just be careful not to bite the razor blade in that apple!!

As writer Dachary Carey observed, "When you're thinking about ways to manage your medical expenses, one option that many people fail to consider is the flexible spending account." Flexible spending accounts were created by Congress eons ago. They help people pay their families' unreimbursed medical expenses such as co-pays, orthodontics, chronic diabetes or asthma medications, eyeglasses, any sort of surgery, hospitalization, or other medical and drug expenses. A flexible spending account (FSA) is sort of like a 401(k). A certain amount of money is withheld from your paycheck each month, free of income taxes or payroll taxes. Usually you can set aside, by installments each paycheck, $4,000-$5,000 per year. The beauty is that for every $1,000 you put into your FSA, you save 28% or 15% (depending on your tax bracket) of income tax. PLUS Social Security tax of 6.2%, PLUS Medicare tax of 1.45%, PLUS your State income tax. This means in the 28% bracket you save $356.50 in taxes for every $1,000 of medical expenses you channel through your FSA!!! In the 15% bracket it's $226.50. If you sock away $5,000 to FSA, you save $1782.50 or $1,132.50!! Plus State income tax!! What a great tool to ease the burden of medical expenses!!! What a rosy apple Congress had dropped into your bag!!!

There is one problem. In true Lex Luthor fashion, Congress has inserted a razor blade into your apple!! The razor blade is this: When you set aside money for your family's medical expenses in an FSA, and you don't spend it ALL by 12/31 (or whatever your annual deadline is) the institution holding your money gets to confiscate the whole balance. Thousands upon thousands of people lose their entire FSA balances to managing institutions every year!! Do you find that harsh? Hard to believe? Unjust? Do you think it would make more sense to just let folks keep their own money in their FSA for rainy-day medical expenses?
Well, with that caveat, the FSA is a really smart way to help pay family medical expenses. You can use it for medical expenses of you, your spouse, and your dependents. Check with your human resources department about how to begin, because there is usually an annual election made sometime before January 1 -- or sooner. And don't bite into that razor blade!!

PS -- Congress is about to take away, or cap, and/or tax FSA's. As one arrogant SOB, Ron Lieber, wrote in the New York Times, "Use the tax break before you lose it, because many of you probably don't deserve to have it in the first place." Is that arrogant or WHAT??

You might want to e-mail and/or telephone your senators and congressional representative about this. Tell them to leave your FSA alone and get the razor blade out of the damn apple!!! Here's the link for that:

REMOVE THE RAZOR BLADE FROM THE APPLE!!!
CLICK HERE:
CONTACT YOUR CONGRESSMAN AND SENATORS HERE



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Thursday, October 22, 2009

MONTREAL GAZETTE DEFENDS CANADIAN HEALTH CARE SYSTEM

by JC Leahy

PLEASE take a look at Canada's single-payer health-care system. That type of single-payer system is the STATED goal of Barack Obama, Hillary Clinton, and many influential reformers in the United States.

The Montreal Gazette, a liberal Canadian newspaper, believes that Americans are mis-informed about Canadian health care. A link to that article is below. Believe it or not, the Gazette's DEFENSE of Canadian health care financing goes like this:

1. Health care waiting lines in Canada are "horrible" and getting worse.

2. There is "something fundamentally wrong when individuals in this country (Canada) are forbidden from spending their own money on their own health - unless they go abroad."

3. HOWEVER, the US system is worse because the US has lower life expectancy and higher infant mortality rates.

Hmmm...This assumes that life expectancy and infant mortality depend on the health-care financing system. Actually, however, infant mortality depends largely on low-birth-weight babies, the prevalence of which, in turn, depends very much on race. Life expectancy also, statistically, varies by race. For example, the United States' longest-living group seems to be Japanese Americans. If a single-payer system would make people live longer, Japanese in Japan would live longer than Japanese in America. However, Japanese live about the same length of time whether in Japan or America. Canada's population is mostly white with some Asian, but few blacks. That actually accounts for the differences in infant mortality and life expectancy.

On the other hand, what the Motreal gazette calls "horrible" waiting lines are definitely caused by the single-payer system. Everyone knows and admits this. Also, the ban on spending money on one's own health care results from the single-payer system. After all, if there are "horrible" waiting lines, wouldn't it be unfair to let the "rich" jump to the front of the line just by paying for their own health care??

The Canadian single-payer health care financing system is bad for Canadians. Even it's advoates admit that it creates "horrible" waiting lines. Also it forces many sick people to seek health care outside Canada -- or worse, to die waiting for care. Barack Obama's brand of health care reform is a giant step along the pathway to a Canadian style single-payer system. Democrats are trying to rush this plan through passage before we have a chance to debate it or even to read the legislative bill!! They need to be stopped immediately!!!!

Please, shake off your apathy (if any) and call every senator and congressional representative that you can!!!!!!!!!!!! Now. Here's the link to contact them: