House panel sends 1099 tax reporting to the floor
This is a big aspect of the health care law when it comes to small business administration. This 1099 law is essentially a way for the gov. to collect more taxes to pay for the health care law. By law all small companies will have to file 1099 on services or products they receive. A good example would be a buying a printer. After you purchase that printer you then will file a 1099 for the company you bought it from. So the 1099 are going to add up for the small business. This law will take valuable company resources to keep up with all of the 1099’s. Small companies do not have a lot of resources so to dedicate an employee or an office manager to this task takes a way from the core of the business.
All so noted in this repeal is the tax subsidies. “400 percent of the federal poverty level. Under the plan, consumers whose income increases to more than 400 percent within one year would have to repay their entire tax subsidies — a potentially significant hit of up to $12,000” Right now if you fall into that 400%-500% of the federal poverty level you will be eligible for either tax subsidies or tax credits through the health insurance exchange. This new bill would state that if you went over the 400% you would have to pay back the subsidy. I think $12,000 sounds about right for the subsidy.
For example, if a resident has coverage through the health insurance exchange and they get promoted to where their family no longer fall into the 400% category they will get hit very hard. Lets say a contract employee has a health insurance policy and they get a large job in one year that take them out of the subsidy level then they would also get hit hard.
This subsidy is a huge aspect to the health care reform law. Here is the crazy part of this. HHS has not clarified if there will be a subsidy or tax credit.