Posted on 07/11/2012 3:30:00 PM PDT by MrChips
God-willing, Obamacare will be repealed. But, I am trying to calculate actual costs for comparisons' sake, and I need and answer to this question. I have looked everywhere online and I cannot find an answer.
I know that Obamacare provides subsidies for the poor to buy insurance. But many people are just above the income threshold for such assistance and cannot afford insurance (yet will be penalized with a tax). Still, for the self-employed after 2003 premiums became 100 percent deductible at tax time. The deduction – which you’ll find on Form 1040, Line 29 – allows self-employed people to reduce their adjusted gross income by the amount they pay in health insurance premiums during a given year. Today, the IRS says this deduction is claimed on 3.6 million tax returns and was worth a total of $21 billion in 2008. Will this practice continue under Obamacare? I cannot find the answer.
Maybe, but don’t forget the “Cadillac Tax” of $8,000 per person on good health policies. EVERYONE gets taxed under ObamaTax.
Why, is this the determining factor as to whether or not you support 0bamacare or not? ; )
Of course not. It’s an Orwellian nightmare to which I am adamantly opposed. But, if it goes through, it affects me financially. I want to know precisely how.
As far as I know, no one’s still actually read the law.
The poster never said that would determine his support for Obamacare. Why did you jump to that conclusion. He's just asking a question that's evidently important to his situation.
I can see why you’re confused. I visited more than a half dozen sites before discovering this:
“Self-Employed Health Insurance Deduction – Unfortunately, the payments that small-business owners make for health insurance premiums for themselves and their families won’t be as tax beneficial for 2011 tax returns as they were for 2010. The premiums paid for health insurance by the small-business owner will be still be deductible on page one of form 1040, but unlike 2010, those same premiums will not be included on Schedule SE, Self Employment Tax. That means net earnings from self employment will be higher and the related Self Employment Tax will be higher. This is in effect a 13.3% tax hike on the small-business owner. The NASE is committed to eliminating this inequity and restoring this deduction.”
http://www.nase.org/nase_news/Press_Releases/2012-01-09/2011_Tax_Changes_For_The_Self-Employed.aspx
But even this account wasn’t entirely clear. It sounds as if the elimination of the deduction was part of the tax/budget deal, not Obamacare per se, but I may have misinterpreted. What a mess!
Thanks, but I think that applies to this past year’s tax returns only. It DOES sound like they are phasing it out. But who knows what 2013 and 2014 will look like?
Thank you.
To bring busybody, self promoting posters out of the woodwork.
If you're talking about premiums owed to the gov't, it's a tax and you must pay it.
On the other hand, if it's money to be refunded to you, it's a penalty and therefore not deductible.
I can't point you to the rule that says this, but mark my words...
My guess is that if you queried NASE, they would have someone quite knowledgeable about this issue. It could be something that doesn’t get resolved until the taxmageddon bill is considered by Congress after the elections.
Thanks. I will try that.
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