Ryan Ellis

ATR Supports Bill to Expand and Improve Health Savings Accounts


Posted by Ryan Ellis on Wednesday, March 4th, 2015, 5:35 PM PERMALINK


This week, H.R. 1196, ‘The Health Savings Act’ was introduced in the U.S. House of Representatives. Health savings accounts (HSAs) are used in conjunction with low premium health insurance plans so that families can spend their own money on their own health needs. This legislation will make important improvements to HSAs to allow individuals and families greater freedom to finance their medical needs. ATR urges all members of Congress to support this legislation.

H.R. 1196, introduced by Congressman Michael C. Burgess, M.D. (R-Texas) makes several commonsense improvements to HSAs. This bill creates child HSAs to help parents meet the costs of caring for young children. Specifically, this will allow families to set aside part of their hard-earned after tax dollars towards the wellbeing of their children.

The legislation also raises the contribution limit that individuals are permitted to contribute to their HSAs to equal the annual out-of-pocket maximum. Lastly, H.R. 1196 protects individuals from losing money in HSAs from bankruptcy. If an individual faces bankruptcy, the money in an HSA is protected in the same manner as retirement accounts.

This legislation will increase patient choice, update and improve HSAs and allow American families the freedom to plan and finance their medical needs. ATR fully supports the Health Savings Act and urges all members of the House and Senate to support this bill.

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Rubio-Lee Tax Reform Plan: What Pro-Growth Looks Like in the 21st Century

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Posted by Ryan Ellis on Wednesday, March 4th, 2015, 9:53 AM PERMALINK


Senators Marco Rubio (R-Fla.) and Mike Lee (R-Utah) have introduced a tax reform plan which aims to be simultaneously pro-growth, pro-family, and much more simple than the current tax mess.  Here are the major components:

Business tax rate of 25 percent.  The corporate income tax rate is reduced from 35 to 25 percent.  The top income tax rate for “pass through” or “flow through” firms like Subchapter-S corporations, partnerships, LLCs and sole proprietorships would fall from 39.6 percent to 25 percent.  All businesses face the same income tax rate.

Zero percent tax rate on capital gains, dividends, and interest.  The plan reduces the regular tax rate on capital gains and dividends from 20 percent today to 0 percent.  Interest would also face a 0 percent tax rate (though interest is no longer deductible for businesses), meaning that all savings—even in taxable brokerage accounts and deposit accounts—would benefit from tax free growth.  All savings would work much like Roth IRAs do today.

Top personal rate cut to pre-Obama levels.  The top personal income tax rate would be reduced from 39.6 percent to 35 percent.  Exceptions obviously apply for business income (25 percent) and savings income (0 percent).

Simple two-bracket tax system.  The first $150,000 of taxable income for married couples (half this for singles) would face tax at a 15 percent rate.  All income earned above these levels face tax at a 35 percent rate.  But see the business/investment exception rates above.

Full business expensing.  All business capital investments—including equipment, building, inventories, and land—would be immediately and fully deductible from taxable income.  This would replace our current slow, multi-year deduction regime known as “depreciation.”  All investments are deducted the year the cash is actually spent.

Moving from worldwide to territorial taxation.  Any money repatriated from overseas (where it has already faced local taxation) would see no additional tax from the IRS.  To help finance this, a special 6 percent one-time tax (paid over a decade) is assessed on current overseas profits.

Kills the death tax. The plan fully eliminates the death tax.

Pro-family tax reforms.  Creates a new $2500 child tax credit (on top of the current $1000 one) creditable to both income tax and payroll tax liability.  No more marriage penalty.

Simplicity.  Two brackets for individuals. The AMT is repealed.  The standard deduction is repealed and replaced by a $4000 tax credit for couples (half that for singles).  Only mortgage interest and charitable contribution deductions remain (these can be taken in addition to the personal credit).  Most returns would be postcard-sized.

Photo Credit: 
Gage Skidmore

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grover sucks Satan's c***

Read Ezekiel 16:49-50

magic1114

It makes too much sense... That's why the Dumbocrats will fight to reject it.


Surprise: Poorest Obamacare Enrollees Face $530 IRS Tax Bill

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Posted by Ryan Ellis on Tuesday, February 24th, 2015, 10:56 AM PERMALINK


The majority (52 percent) of Obamacare enrollees receiving an advance premium tax credit to purchase Obamacare insurance is facing the prospect of paying back $530 of that tax credit to the IRS, according to a new study from H&R Block.  This clawback is reducing the refunds for these taxpayers by 17 percent this filing season.

Under Obamacare, taxpayers earning between 133 and 400 percent of the federal poverty level are eligible to receive a tax credit to help purchase insurance on Obamacare exchanges.  This tax credit is calculated using old tax data of the recipients.  The credit is advanced ahead of time to the taxpayer's insurance company.  The taxpayer must reconcile at tax time the advance credit received with the actual credit she is eligible for.

Families of four earning less than $97,000 are eligible for a credit.  So is a single mother with two children earning less than $80,000 and an unmarried/childless taxpayer earning less than about $12,000.  By definition, these are the lowest income recipients of Obamacare health insurance outside the Medicaid-eligible population.  Higher income taxpayers received no tax subsidy and aren't facing this tax season surprise.

According to the study, a majority of credit recipients--52 percent--have had to pay back the IRS an average of $530, reducing their refunds by an average of 17 percent.

It remains unclear how this information relates to the revelation last week that 800,000 healthcare.gov Obamacare customers (and a further 100,000 in California) received inaccurate 1095-A tax reporting forms.  Doing the reconciliation described here would not be possible for these nearly 1 million families.

Also in the H&R Block report is the news that the individual mandate penalty is averaging $172. This is likely to rise in future years as the penalty for most taxpayers will equal 2.5 percent of their adjusted gross income.  A family earning $100,000 would see a penalty of $2500 for failing to obtain qualified Obamacare health insurance.

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How Obamacare Screwed Up 800,000 Tax Returns

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Posted by Ryan Ellis on Friday, February 20th, 2015, 1:00 PM PERMALINK


The Associated Press is reporting today that an "erroneous" glitch in Obamacare tax forms is causing filing season to come to a halt for 800,000 taxpayers.  Tens of thousands of these families have actually already filed and will need to file amended returns redundantly.

Americans for Tax Reform can shed some light on what the "erroneous" problem is.  The affected form for Healthcare.gov enrollees is known as an IRS Form 1095-A.  It documents health insurance coverage obtained through the federal healthcare.gov exchange.  It reports premiums charged by month.  It is supposed to also report the amount of a tax credit advanced from the IRS to the covered family's insurance company.  Finally, a middle column is supposed to say what the average premium amount was for the second lowest-cost silver plan (the poetically-named "SLCSP").

All three inputs--monthly premium cost of the health insurance plan, the SLCSP, and the advanced premium tax credit amount--are vital to calculating the accurate tax credit a taxpayer is entitled to under the Obamacare law.  Without even one of these inputs, the calculation is thrown off.  It would therefore also be impossible to determine whether the advanced tax credit was too generous (in which case the taxpayer may owe the IRS money), or too stingy (in which case the taxpayer claims the remaining credit amount on his 1040 filing).

ATR has obtained two 1095-A tax forms issued to healthcare.gov customers.  In each case, the silver plan column each month had an entry of "$0.00."  No data was provided.  It was impossible for these taxpayers to even make a guess of what their tax credit for the year was supposed to be, or if they were due a tax credit at all.  

It is ATR's belief that these 800,000 taxpayers were similarly issued 1095-As without the absolutely vital SLCSP numbers.  Until those numbers are provided by the dysfunctional healthcare.gov bureaucracy, it will not be possible for these taxpayers to complete their income tax filing accurately. They will not be able to determine if any advanced tax credits they received were too generous or too stingy.  

800,000 families are literally caught in limbo until healthcare.gov gets its act together.

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ATR Supports “Health Freedom for Seniors” Act


Posted by Ryan Ellis on Tuesday, February 17th, 2015, 12:37 PM PERMALINK


Last week, H.R. 975 the “Health Freedom for Seniors Act” was introduced in the U.S. House of Representatives. This legislation will reform health savings accounts (HSA) to empower seniors to save money for their own health care. ATR endorses this legislation and urges members of Congress to support this bill.

H.R. 975, introduced by Representative Bill Huizenga (R- Mich.) will help ensure seniors are able to use their hard earned savings for retirement.  Under current law, Americans who reach age 70 and one-half are required to begin making “required minimum distributions” (RMDs) from IRAs and 401(k) plans. The accounts must be drawn down, regardless of whether the taxpayer has other funds with which to support themselves.

H.R. 975 would put a stop to this absurd law by permitting seniors a tax-free rollover of their RMD into a HSA.  Because HSA dollars have no required distributions, this allows savings to be preserved for things like long-term care insurance, Medicare premiums, and other health needs as one gets further into retirement. 

With healthcare costs spiraling out of control, seniors need this common sense reform now more than ever to help pay for their healthcare expenses. ATR supports this legislation and urges Congress to bring this legislation forward for a vote.

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ATR Supports Tax Relief for Working Parents


Posted by Ryan Ellis on Tuesday, February 10th, 2015, 1:36 PM PERMALINK


Last week, H.R. 750, the “Family Care Savings Act” was introduced in the U.S. House of Representatives. This legislation will make improvements to dependent care flexible spending accounts (FSAs) and help Americans manage the rising costs of raising a family. ATR endorses this bill and urges members of the House to support this legislation.

H.R. 750, introduced by Representative Patrick McHenry (R- N.C.) and Representative Grace Meng (D- N.Y.) raises the cap on dependent care FSAs from $5,000 to $10,000 and indexes it to inflation after the first year of enactment. These FSAs allow employees to save part of their pre-tax earnings for specific expenses including medical and dependent care. Dependent care FSAs can be used for children under the age of 13, anyone who is physically or mentally unable to care for themselves, or any adult whose care is predominantly paid for by another person.

This legislation will provide a much needed update by increasing the current cap which was set almost 30 years ago when dependent care FSAs were first created in 1986. H.R. 750 will improve dependent care FSAs and help families plan and budget for the expenses of caring for children, disabled spouses, or elderly parents.

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ATR Supports Permanent Small Business Expensing Bill


Posted by Ryan Ellis on Monday, February 9th, 2015, 10:33 AM PERMALINK


This week, the U.S. House of Representatives will vote on H.R. 636, “America’s Small Business Tax Relief Act.” Small businesses are the backbone of the economy and a pathway by which millions achieve the American dream. H.R. 636 will provide important tax relief to small business across the nation. ATR supports this legislation and urges members to vote yes.

H.R. 636, sponsored by Representative Patrick J. Tiberi (R-Ohio) expands and updates Section 179 of the tax code to provide small business owners, farmers and ranchers with regulatory relief that will help reduce the cost of capital and allow them to more easily invest their hard-earned resources back into their businesses.

Specifically, this legislation will make permanent a tax provision allowing small employers to expense up to $500,000 of equipment purchases per year. If current law is not changed, small businesses can only expense $25,000 of purchases for things like computers, office furniture, manufacturing equipment, etc.  The rest must be subject to a slow, multi-year deduction process known as "depreciation."

For many Americans, starting a business is the reward for years of hard work, good decisions and innovative ideas. Each year, millions of Americans across the country invest countless hours, take out loans and enlist the help of friends and family in order to start their own business. This legislation will provide these small business owners with much needed tax relief that will help put them on the pathway to success. 

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ATR Supports Senate GOP Balanced Budget Amendment


Posted by Ryan Ellis on Thursday, February 5th, 2015, 3:23 PM PERMALINK


This week, a Balanced Budget Amendment to the Constitution was introduced in the U.S. Senate. This Balanced Budget Amendment proposal is pro-taxpayer and will help put America on a path towards fiscal responsibility. ATR urges all Senators and Congressmen to support the BBA.

S.J. Res 6 has been cosponsored by all 54 Republican Senators. This common sense proposal will help direct members of Congress towards enacting fiscally responsible policies.

This amendment limits spending to 18 percent of Gross Domestic Product (GDP). Capping spending at 18 percent requires government to live within its means. This strict spending cap is a significant step towards reining in the size of government and will help protect taxpayers from reckless and unnecessary government spending.

Most importantly, this amendment will protect taxpayers from unnecessary and burdensome taxes and instead requires Congress to balance the budget in a responsible way. S.J. Res 6 requires a two-thirds supermajority of members of each House of Congress in order to enact any new tax. However, 48 members of the Senate and 221 members of the House have signed the Taxpayer Protection Pledge, promising their constituents they will not support any proposal that contains a net tax increase. Therefore, the BBA will prevent Congress from balancing the budget using tax hikes and will instead force politicians to address Washington’s rampant spending problem by reducing spending.

S.J. Res 6 will rein in out of control government spending, protect taxpayers and force Congress to live within their means. ATR encourages members of the Senate and House to support the BBA.

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IRS to Steal Tom Brady's Superbowl MVP Truck

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Posted by Ryan Ellis on Wednesday, February 4th, 2015, 12:36 PM PERMALINK


The world champion New England Patriots will celebrate with the city of Boston today in the now customary duck boat parade downtown.  It would be fitting if an IRS agent was waiting for quarterback Tom Brady at the end of the route.

Specifically, he might want to talk about Brady’s new truck.  You know, the 2015 Chevy Colorado he won as Super Bowl MVP. The same truck Brady wants to hand over to Patriots rookie cornerback Malcolm Butler, who won the Super Bowl on a last second interception.

The truck is considered a taxable prize under the Internal Revenue Code, section 74.  It’s taxed at Tom Brady’s marginal income tax rate of 39.6 percent (plus state income tax, but I’ll leave the focus on federal here).

According to TrueCar.com, the fair market value of a 2015 Chevy Colorado is in the neighborhood of $34,000.  This is likely an understatement, since it includes none of the options that Chevy no doubt added to the vehicle.

So Tom Brady will pay ($34,000 x 39.6 percent) in taxes, or $13,500 in income tax on this prize.

But the pain won’t stop there for the greatest quarterback in NFL history.

Don’t Forget About the Gift Tax, Tommy

According to ESPN, Brady has decided to gift the truck to Patriots rookie cornerback Malcolm Butler, who made the game-clinching interception on Sunday night.  This is not a taxable event at all for Butler–gifts are never taxed to the recipient.

Brady is not so lucky.  He’s going to have to pay gift tax on this transaction.  The tax code only allows you to give $14,000 tax free from any one person to any one person before assessing a donor level tax on the gift.

Assuming this will be Brady’s only gift to Butler this year, the transaction sets up a taxable gift for Brady of $20,000 (the $34,000 value of the truck minus the $14,000 gift tax exclusion).  Assuming Brady has made at least $1 million of taxable gifts up to this point in his life (a safe bet), he will owe a 40 percent gift tax on this $20,000 taxable gift.

That’s a $5000 gift tax on top of a $13,500 income tax on the truck, for a combined federal tax hit of $18,500.

That’s over half the value of the truck itself.

What About His Game Check?

Note that the above analysis is only for the federal income tax owed and gift taxes due on the MVP prize.  What about the paycheck Brady collected for winning the Super Bowl?

According to CNBC, the NFL pays a player on a Super Bowl winning team a salary of $97,000 for the game.  Brady doesn’t appear to have any Patriots team bonuses for the game, so this is likely the amount we’re dealing with.

Brady will face income tax at the top rate of 39.6 percent.  In addition, since this is a wage, he will also owe the top Medicare tax of 3.8 percent, half of which will be picked up by the NFL.  Put those together, and Brady will pay $42,000 in federal taxes on the game.

He didn’t get hit that hard by the Legion of Boom Seattle defense, but the IRS is a much bigger foe.

Photo Credit: 
Keith Allison

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James S. Melbert

One thing (among many) that ticks me off, is the constant whine of
conservatives to get back to the small government they think the
founders of the country wanted.
The actual reason that they dealt
with a small government was because WE WERE A SMALL COUNTRY, STUPID.
None of the T partiers seem to realize that as our population grows, the
government services must necessarily follow. Their sort of reasoning
would put government back into such a few hands that our life style
would be in jeopardy.


ATR Supports Legislation to Prevent the IRS from Targeting Taxpayers Based on Political Ideology


Posted by Ryan Ellis on Tuesday, February 3rd, 2015, 12:03 PM PERMALINK


ATR supports several bills that will protect taxpayers from being targeted by the IRS because of their political beliefs or affiliation. We urge members of the U.S. House of Representatives and U.S. Senate to support this legislation.

The IRS has the power to designate groups as tax-exempt social welfare organizations provided they are primarily engaged in activities to promote the common good and general welfare of society. However their ability to impartially perform this responsibility has been called into question since it was revealed that they had inappropriately targeted conservative social welfare groups for scrutiny.  

S. 273, sponsored by Senator Ted Cruz (R-Texas) and H.R. 599, sponsored by Representative Paul Ryan (R-Wis.) would make it a criminal offense for any IRS employee to willfully discriminate against groups based on their political beliefs or any policy statements made.

S.283, sponsored by Senator Jeff Flake (R-Ariz.) would roll back the IRS standards of definitions for “social welfare organizations” to January 1, 2010. The bill will also suspend any IRS rulemaking in this area until 2017.

These bills will help protect taxpayers from future IRS overreach. In the wake of the IRS targeting conservative groups based solely on their ideology, this legislation is needed now more than ever.

 

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