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Taxes, W-2s & Health Care Reform

What’s the biggest federal tax subsidy? 
Most people would guess something other than the tax exclusion for employer provided health insurance! 
“Employers’ payments covering premiums for employer-sponsored health insurance are exempt from federal income and payroll taxes. Any portion of premiums paid by the employee is typically excluded from taxable income and is therefore also tax-free, although some employers require employees to pay their share of premiums out of after-tax income.” Who benefits the most? “Because the exclusion of premiums for employer-sponsored insurance reduces taxable income, it is worth more to taxpayers in higher income tax brackets than to those in lower brackets.”  So the more you earn, the more you benefit from this subsidy. Learn more at the Tax Policy Center website:
Effective January 1, 2013, employers are required to report the value of each employee’s health insurance premiums on their W-2. The reportable cost includes boththe employer and the employee portions of the total premium.  This information will not affect your taxes for 2013; the amount will just be printed on your W-2.
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Taxes, W-2s & Health Care Reform
Taxes, W-2s & Health Care Reform
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