Taxing Health Insurance Policies
Jan 11th, 2011
There are many rumors being discussed out in the public arena regarding the taxing of every individual’s health insurance policy in the near future. This rumor has many individuals very angry and upset, yet it still remains nothing more than a rumor. What is factual is that the cost your employer pays in your behalf for an annual affordable health insurance policy will begin to appear on the W-2 form.
This will be a guide for the Internal Revenue Service to be able to discern who does have a legitimate health insurance policy and who does not. At this present time, this will be more for informational use, but we all are aware of what is coming down the road. We are being reassured that no individuals who purchase an affordable health insurance policy will be taxed.
However, the possibility of having our annual health insurance policy taxed in the future does exist. There are a few problems with this theory, but in time, it will all be worked out to the benefit of the government and of course the Internal Revenue Service. One of the problems the government is facing is how to tax individuals on health insurance policies that are paid for through their employers.
The way it works at the present time for those larger corporations that are still offering health insurance coverage as part of the hiring package is to have the employee pay a small portion towards their average monthly cost for health insurance. Yet employees are still unable to deduct their portion of the monthly health insurance payments when they file their Internal Revenue Service Form 1040.
It remains for the employer to deduct the entire cost of each employee health insurance policy annually. What is going to happen when the law changes and your affordable health insurance is listed on your annual W-2 and it does become taxable? Will you then be permitted to deduct that portion of the annual health insurance policy that you had deducted from your payroll check?
What happens to your employer who is paying the bulk of your annual health insurance policy? Will your employer be mandated by law to add the portion of your annual health insurance policy that the employer paid? Will your employer only be permitted to deduct that portion of the employee health insurance policy that the employer paid? There are so many more questions to ask on this particular topic, but it is a little early to try to decipher the many details.
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