The American Health Care Act takes an axe to the tax-laden portions of the ACA, including the notorious individual mandate.
1 min read
Republicans have now unveiled their long-promised Obamacare replacement: the American Health Care Act. The primary goal of the bill? Roll back the taxes put into place by the Affordable Care Act, and replace subsidies with tax credits. If the bill passes, it will have a huge impact on the tax landscape, so we’ve put together a quick overview of how tax pros and their clients will be affected by the proposed law.
The American Health Care Act (AHCA) takes an axe to the tax-laden portions of Obamacare, pruning away the well-known individual and employer mandate taxes. The bill would also dismantle other lesser-known taxes, such as the Medicaid tax on Americans who earn more than $250,000 per year, taxes on insurance and medical equipment companies, as well as “a flurry of tax increases on health savings accounts (HSAs) and flexible spending accounts (FSAs),” (Forbes).
One tax not repealed by the AHCA is the so-called Cadillac Tax. The plan does, however, delay the tax further. The Cadillac Tax is currently scheduled to go live in 2020, and the AHCA pushes that date further, to 2025. Ultimately, this tax on high-end, employer-provided health care plans doesn’t live on, so much as it limps toward its inevitable doom.
In an effort to replace the Obamacare federal insurance subsidies that aim to make health insurance more affordable for lower-income Americans, the Republican health care replacement introduces tax credits. The amount of the credit are dependent on both age and income and will be available to people who purchase insurance through a public marketplace starting in 2020. Households will only be able to claim the credit for the five oldest family members, and the credit maxes out at $14k per year.
Tax credits for individuals making less than $75,000 per year ($150,000 if married filing jointly) are:
Those tax credits are reduced by $100 for every $1,000 the taxpayer makes over the $75,000 (or $150,000 if married filing jointly) income threshold. (All figures via Healthaffairs.org)
Want more information about new tax changes on the horizon? Check out our post about the big changes President Trump’s administration has in mind for corporate tax rates.
Explore more of our recent Articles, User Stories, and Ebooks.
3 min read
3 min read
Canopy takes the headaches out of client management by offering a way to keep client info organized.
I love how easy it is to setup a new client in this software. Once set up, it's one click to get IRS transcripts downloaded for my review. This saves me at least an hour each week in comparison to the software I used to use.
This makes workflow for tax resolution manageable. This business is a bunch of hurry up and wait. This system helps to refresh my memory while transitioning to different clients.
The ability to securely share documents with clients as well as complete POAs from client contact data already in Canopy. The ability to route workflow between team members with color coded statuses allows us to work efficiently.
Cool features, outstanding customer service, constantly updating to make it better. I love that I can upload files easily to a secure client portal and we don't have to email files anymore. Absolutely can't imagine not having this software.
It's safe and secure. Clients are able to upload documents and the documents are saved their portal which as a result, keeps us better organized. The task feature keeps us organized and we know exactly the status of each client.
Submit this form, and we will be in touch soon to give you a custom demo.
Set a time for one of our product specialists to give you a guided tour practice.
Leave a comment!