The Health Care Reform Act will no doubt bring about many changes to our health care system, but, since passage last March, it has engendered a lot of confusion. Because so many false claims have cropped up as a result of this confusion, I want to share a few facts with you.Two widely circulated claims have caused a lot of concern:
· Myth: Beginning in 2011, I will be taxed on the value of my employer-provided health insurance. Although the new act requires employers to report the cost of employee-provided health care coverage on an employee’s Form W-2, the listed amount will not impact an employee’s tax liability. It is reported for informational purposes only.
· Myth: Beginning in 2013, I will be taxed on the sale of my home. It is true that the health care reform legislation imposes a 3.80% Medicare contribution tax on the net investment income of high-income taxpayers, and this includes the sale of a home. But there is an exclusion from taxable income on the sale of a principal residence. For qualified individuals, the exclusion will apply up to the first $250,000 gained from the sale of a principal residence; for married couples filing jointly, it will apply up to $500,000.
Rumors and false claims will always be around, but there is one truth you can rely on: it is never too soon to begin financial planning. Understanding the upcoming regulations will better assist you in planning for the future.
