Top 5 Trend in 2010 - Obama Care!
Dec 27, 2010
We will be posting each day this week a top 5 trend or item for 2010. It may be related to taxes or other items that have affected farmers either in 2010 or looking forward to 2011.
Our first top 5 item is Obama Care. This is actually the result of two bills that were passed earlier in the year. Unless you are a farmer with more than about 50 employees, these two bills will most likely affect you in a positive way for 2010 and 2011. If you are currently paying health insurance for your farm employees and have fewer than 10 employees making $25,000 to $50,000 on an annual basis, you will be entitled to a credit for up to 35% of what you pay on your income tax return. Remember that a credit is usually a dollar for dollar offset to your tax.
However, beginning in 2012, under the current law, all farmers will be required to start issuing form 1099 for all purchases to vendors that total more than $600 per year. Right now, you are required to issue these forms only for services to non-corporate taxpayers. Beginning in 2012, this will be required for all goods and all types of taxpayers. There is a very good chance that this will be repealed this year, but it is the law right now.
Another area that had some controversy was the reporting of health insurance paid on employees form W-2. The requirement is that the amount of health insurance paid for the employee be listed on Form W-2, but not included as part of wages. This was originally required for 2010 W-2s, but the IRS has postponed this to 2011 W-2s.
We are seeing the fight in Congress now on how to fund Obama Care and I am sure that 2011 will have major changes to it. We will keep you posted.