William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

Posts Tagged ‘Medicare’

Income-based premiums triple Medicare costs under PPACA

Posted by William Byrnes on July 31, 2013

For your high net worth and upper middle class clients, Medicare planning has become a critical component of a well-executed retirement income plan.

New rules put into effect under the Patient Protection and Affordable Care Act (PPACA) can impact these clients’ retirement income planning in ways they might not yet realize by increasing their Medicare premiums proportionally as income increases.  The new rules will expand the pool of clients to which these monthly increases will apply.

In today’s environment, it is more important than ever to consider Medicare premiums when planning for retirement expenses.

Medicare Income-Based Premiums … read my analysis at LifeHealthPro – http://www.lifehealthpro.com/2013/05/13/income-based-premiums-triple-medicare-costs-under

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2012 Federal Budget Proposed – High Debt Continues

Posted by William Byrnes on March 22, 2011

Why is this Topic Important to Wealth Managers? Clients will often ask for your “take” on the annual federal budget.   It is important to show the client a command of the the facts and figures before addressing the political perspective of spending and revenue.  Any producer can “mime” someone else’s perspective.  Distinguish yourself with a command of the underlying numbers.  Thus, this week Advanced Market Intelligence presents the facts and figures of the proposed federal budget for fiscal year 2012.

The new 2012 Federal Budget was released by the President.  Below is a summary of the inflows and outflows concerning next year’s proposed budget (in billions of dollars).


Appropriated (“discretionary”) programs:   Security $ 884/Non-security 456; Subtotal—appropriated programs: 1,340

Mandatory programs: Social Security $ 761, Medicare 485, Medicaid 269, Troubled Asset Relief Program (TARP) 13, Other mandatory programs 612; Subtotal, mandatory programs 2,140, Net interest 242, Disaster costs 8

Total outlays 3,819


Individual income taxes $ 1,141, Corporation income taxes 329

Social insurance and retirement receipts: Social Security payroll taxes 659,Medicare payroll taxes 201, Unemployment insurance 57, Other retirement 8, Excise taxes 103, Estate and gift taxes 14, Customs duties 30, Deposits of earnings, Federal Reserve System 66, Other miscellaneous receipts 20

Total receipts 2,627

2012 Deficit $ 1,101

Here are some noted observations of the current budget:   Read the analysis at AdvisorFYI


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Health Insurance Coverage for All Americans

Posted by William Byrnes on January 28, 2011

The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 are generally known as the national health care legislation.  The new laws created a number of changes in the health care insurance system, in general.  These changes will be discussed throughout the week, as presented below.

Under the new law, each individual is required to have “minimum essential coverage” for each month of the year starting in 2014. “Minimum essential coverage” means whichever; a government sponsored program such as Medicare, Medicaid, and TRICARE; an employer sponsored plan; plans in the individual market; and grandfathered health care plans.

For those individuals who choose not to obtain minimum essential coverage, imposed is a penalty to be included in the taxpayer’s annual return.  The penalty applies to each month where the individual is not covered equal to an amount of either 1/12 of the average cost of “bronze” level coverage or the greater of an annual set dollar amount, which is pegged at $695 for taxable years 2016 and beyond, or a set percentage of the taxpayer’s household income, currently 2.5 percent beginning after 2016. (The Legislation includes a phase in schedule for both the flat dollar amount and the percentage of income. The flat dollar amount is $95 for 2014, $325 for 2015. The percentage of household income is 1 percent for 2014 and 2 percent for 2015.)  To read this article excerpted above, please access AdvisorFYI


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The National Health Care Bill Invoice

Posted by William Byrnes on January 4, 2011

Barack Obama signing the Patient Protection an...

Image via Wikipedia

Why is this Topic Important to Wealth Managers? Reviews the National Health Care Legislation’s revenues and expense provisions.  Discusses one area in particular where high income earners are subject to additional tax liability provided by the new law.

There are many new questions being raised by the national health care legislation that was passed into law earlier this year.  The Patient Protection and Affordable Care Act[1] and the, Health Care and Education Reconciliation Act of 2010,[2] created a number of significant changes to the landscape of the health care system in the United States.  The total cost of the program, is estimated at approximately $356 Billion dollars over the ten year period from 2010-2019. [3]However, revenue projections from taxes incorporated into the legislation are actually estimated upwards of $437 Billion dollars over that same ten year period. [4]

Now that we can reasonably be assured the health care bill’s cost is properly allocated and encumbered, let’s see how and where the revenue generating provisions will affect American taxpayers.

The largest single line item that will contribute to the funding of the health care legislation is a new surtax for Medicare.  Estimates that over $200 billion will be raised over 10 years, is a burden carried by only a small percentage of high income taxpayers, estimated at approximately the top 2% of all taxpayers, or those taxpayers who will earn more than $200,000 or $250,000 filing jointly. [5] This means approximately 98% of the population will not be required to contribute to the new surtax with regards to Medicare.  To read this article excerpted above, please access www.AdvisorFYI.com

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Obama’s Christmas Gift to the American Public: Social Security Tax Reduction

Posted by William Byrnes on December 24, 2010

Section 601 of The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (HR. 4853) provides for employee tax and self-employment tax rate reductions.

The Social Security tax is divided by the employee and employer share. [1] For self-employed individuals, a separate but comparable tax applies to covered wages.  [2]

For employees, generally, the term covered wages in this context means, all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash. [3]

Social Security is generally taxed at 6.20% and Medicare (Hospital Insurance) 1.45%. [4] Social Security taxes are composed of (1) the old age & survivors insurance (5.30%) and (2) disability insurance (0.90%) (together known as “OASDI”) tax equal to 6.2 percent of covered wages up to the taxable wage base ($106,800 in 2010 and again in 2011); and (2) the Medicare hospital insurance (“HI”) tax amount equal to 1.45 percent of covered wages. [5]

See the full article at AdvisorFYI


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