Coffee with Michele, Jan and Diana November 2017

Come to the Community Room at Kaldi’s in Chesterfield with your financial planning, tax, and Medicare questions and enjoy a cup of coffee with CERTIFIED FINANCIAL PLANNER™ professional Michele Clark, Jan Roberg, Enrolled Agent, and Diana Wilson, Health Insurance Professional.

There is no prepared presentation, just a casual conversation in a small group environment; your opportunity to pick our brains. Feel free to invite family or friends who could benefit from an hour with us. Open to registered attendees only, due to the size of the room.

It will be Medicare season, bring your questions.

Coffee with Michele, Jan, and Diana
Kaldi’s Coffee Chesterfield
Wednesday, November 8th
10:30 am to 11:30 am

RSVP online Clark Hourly Financial Planning and Investment Management RSVP or call 636-264-0732. Space is limited. Coffee and pastries are complimentary.

Kaldi’s Coffee Chesterfield Missouri address and map. The Community Room is an enclosed room in the back of the coffee shop.

We hope you can join us!

American Health Care Act Passed by House

On May 4, 2017, the House of Representatives passed the American Health Care Act (AHCA). With some changes, this is essentially the same law that was pulled from consideration by the House back in March. Compared to the Affordable Care Act (ACA or Obamacare), the AHCA repeals the health insurance mandate for both individuals and large employers; caps Medicaid funding to states beginning in 2020; eliminates several ACA taxes, including those applicable to high-wage earners; and replaces tax credits and subsidies based on income with tax credits based on age and income. The House passed the AHCA prior to an updated analysis from the Congressional Budget Office (CBO) as to the budgetary effects of the law.

Some ACA provisions remain

Here’s a brief description of some elements of the ACA that remain in place under the AHCA:

  • Insurers are prohibited from discriminating against people with pre-existing conditions. However, beginning in 2019, the law allows states to apply for waivers, in which case insurers in those states could charge people in the individual Marketplace with pre-existing medical conditions higher premiums for about a year if they have a gap in coverage of at least 63 consecutive days.
  • All individual health plans purchased during open enrollment are required to be “guaranteed issue,” meaning an applicant must be offered coverage regardless of health status.
  • The requirement that health plans cover 10 essential health benefit categories remains. However, beginning in 2020, states may apply for waivers, which allow states to redefine essential health benefits for coverage in the individual and small group markets.
  • Dependent young adults can remain on their parent’s health-care plan to age 26.
  • Current lifetime and annual out-of-pocket dollar limits for essential health benefits remain the same, which can be changed for states electing a waiver.
  • Federal funding of Medicaid continues to states that extended coverage to include more people and more services through 2019. Beginning January 1, 2020, federal funding to those states will continue, but only to people who were in the Medicaid program at the end of 2019. Otherwise, beginning in 2020, Medicaid funding to states will be a fixed amount based on the total number of Medicaid enrollees (per capita), and not based on the actual cost of Medicaid services provided to individual recipients.
  • Health insurance Marketplaces and open enrollment periods remain in place.

Major changes

The following are some of the significant changes made by the AHCA:

  • The health insurance mandate and penalty for people who don’t have qualifying health insurance coverage are eliminated, retroactive to December 31, 2015, meaning the penalty would not apply to anyone who didn’t have health insurance in 2016.
  • The mandate that large employers provide health insurance to eligible employees is repealed.
  • The limit that insurers can charge their oldest enrollees for insurance premiums is changed from three times what they charge their youngest enrollees to five times the premium charge.
  • Insurers are allowed to charge a late enrollment penalty of 30% of premiums for health insurance applicants who have a lapse in insurance coverage of 63 days or longer.
  • Starting in 2020, premium tax credits and cost-sharing subsidies are replaced with a flat, age-based tax credit that can be applied to any eligible individual health insurance policy regardless of where it’s purchased (the policy wouldn’t have to be obtained through a Marketplace.) The credits would start at $2,000 for individuals up to age 29 and increase in $500 increments until capping at $4,000 for individuals age 60 and older. Credits are gradually reduced for individuals with yearly incomes exceeding $75,000 and for households that earn over $150,000.
  • Establish a State Patient and State Stability Fund for states that seek waivers of essential health benefits and health rating requirements. Federal funding is available to states electing waivers to provide financial help to high-risk individuals.
  • The 3.8% tax on unearned income for high-income taxpayers is repealed. The 0.9% Medicare payroll tax on high-wage earners is repealed effective January 1, 2023.
  • The tax-free contribution limits for health savings accounts (HSAs) are increased. Also, the provision excluding costs for non-prescribed over-the-counter drugs from reimbursement through an HSA is repealed.
  • The annual limit on contributions to health flexible spending accounts (FSAs) is repealed.
  • The Cadillac tax on high-cost employer-sponsored health plans is suspended for tax years 2020 through 2025.
  • The tax on tanning beds is repealed.
  • The taxes on health insurers and pharmaceutical manufacturers are repealed.

The AHCA now moves to the Senate, where it will be debated and possibly altered. It is also likely that the Congressional Budget Office will provide its estimate of the budgetary effects of the AHCA.

Effective 2020, the AHCA repeals tax credits available for low-wage, small employers that provide health-care coverage to their employees.

Article Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2017

Prepare For Your Tax Return: A Tax Document System

Tax time doesn’t have to be drudgery.  With a very simple system you can have the information that you need gathered together in one spot to make the process much easier this year and going forward.

The key is to have one year-round dedicated spot for incoming tax information and receipts.  Yes, that’s right, I said year-round.  I know that this is January and you are starting to get the annual onslaught of W-9s, 1099s, mortgage interest information, and other tax documents, and it is very important to establish one spot to collect all the those documents that come in.  That will be very helpful.   But that part of the tax return really isn’t the challenge is it?  It is tracking down the deduction information and the receipts that go with it.  If you are anything like me, you have a lot of donation receipts, I am soft hearted and I usually say yes at the grocery checkout lane when they ask me for a donation.  And I want to take all those little donations off of my taxes, I might be soft hearted, but I’m not soft headed!

If you don’t have a system, start with something simple like this:

1) Create your dedicated spot.  It can be a drawer, a decorative box, an accordion file, or a special section of your file cabinet.  You could even do this electronically by scanning and creating folders.  Just find a system that works for you.

2) Create one file for all the tax documents that come in between January 1st and March 15th, this is a temporary holding spot for those documents like W-9s and 1099s.

3) Create a file for each type of deduction which results in many receipts or statements for you, then one “catchall” file for deductions that do not have many reciepts.  For example, you might have a file for Healthcare, a file for Childcare, and a file for Donations, because there are many receipts for each of those.  But then in your “catchall” file you might put any receipts/statements for deductible expenses such as investment related expenses, tax preparation fees, unreimbursed business expenses, etc.

4) Create files for your bank statements, investment account statements, credit card statements, you can then refer back to these for deductible expenses at tax time.  These files can be with your tax documents or with your other household files; as long as you can easily get your hands on them at tax time.

Having a system like this has another benefit as well.  Do you have a Flexible Spending Account (FSA) or Health Spending Account (HSA) available to you at work?  Keeping a separate file of your healthcare expenses and throwing every single healthcare receipt into it throughout the year will let you know exactly how much you spend on healthcare in a year.  Having that information will allow you to maximize
the tax savings you have available to you through the Flexible Spending Account benefit through your employer.  The same goes for childcare expenses.

Having a system like this will allow you to keep more of your money in your pocket and out of Uncle Sam’s.

It can be very tempting to file your taxes on February 1st, keep in mind the types of investments that you own, because some investments can have K-1s or amended 1099s that come as late as mid-March.

It’s on your To-Do.  Let’s get it To-Done!

Just getting started?  Create your dedicated spot and set your files up. Put it in an easy to see and use spot so that tax time is easier this year and future years.

Ready to take it to the next level?  Make tax time even easier by making notes to yourself.  If you are paper based, throughout the year notate taxable events on receipts and statements.  Know that you charged a charitable donation to your credit card?  Jot a note and throw it into the donations folder so you know to look for it next year.  If you are software based, software such as Quicken and allow you to note transactions as tax related.