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Tuesday, July 13, 2010

Your 2011 W-2

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This is from e-mail in-box.  It is shocking.  It's not, however, fully accurate.  In a way,  it's worse than it sounds. The amount to be reported on your W-2 is NOT the amount of health insurance premiums withheld from your paycheck; it's the amount that your employer pays on your behalf -- which is very often a LOT MORE!  On the other hand, this reported amount is NOT going to be included in your taxable income, at least for the present. For the future, however, we must suspect and suppose that the reason for reporting the income on your W-2 is to implement taxation of your health insurance benefits.  That is why Kiplinger includes this change in its list of 13 tax changes that could affect you.  If you have contrary information, post a comment below. -- JC Leahy

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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 concern or Governmental body of some sort.

If you're retired? So what; your gross WILL go up by the amount of insurance you get.

You will be required to pay taxes on a large sum of money that you have never seen.

Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year.

For many it also puts you into a new higher bracket so it's even worse.

This is how the government is going to buy insurance for 15 % that don't have insurance and it's only part of the tax increases.

Not believing this I researched the summaries and here's what I'm reading:

On page 25 of 29:

TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET

PROVISIONS - (sec. 9001, as modified by sec. 10901) Sec.9002. "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employee's gross income."

Joan Pryde is the senior tax editor for the Kiplinger letters. Go to Kiplinger's and read about 13 tax changes that could affect you. Number 3 is what I just told you about. [CLICK HERE FOR THE KIPLINGER ARTICLE]

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