IRS Clarifies W-2 Reporting of Healthcare Costs

Just saw this article that summarizes the recent clarification of the W-2 Reporting requirements for Healthcare costs by the IRS.

Good Employment News for CPAs & Accountants

I read some good employment news for CPAs and Accountants here and here. Apparently, Certified Public Accountant is one of the Top 10 Best Jobs in America according to CNN Money. In addition, accounting and finance professionals are expected to see an uptick in hiring and salaries in the coming year.

Crystal Cathedral Files for Bankruptcy

I just read this article about the Crystal Cathedral filing for bankruptcy in California. It was a sad reminder to me that even churches aren't exempt from the pitfalls of debt. Our current economic reality is causing many in our society from governments to businesses to individuals to churches to struggle with past obligations.

When we borrow money, we presume on the future. We presume that future cash inflows will cover cash outflows. We presume that future property values will be higher than present values. We presume that the economic future will always be as good or better than the present. When the future doesn't turn out like we presumed, then debt begins to affect our lives, our ministries, our businesses, our country, our future.

Although it may not be realistic to completely avoid debt (each of us has to make our own determination), I think we have to carefully consider the pitfalls before we enter debt obligations. We should include the worst case scenario in our assessment of the future. If we aren't careful our debt will control our future.

Recent Change to Cell Phone Rules

I read this today. A new rule included in a recently enacted small business tax relief act may change the way that churches handle cell phones provided to staff. The article suggests awaiting further guidance from the IRS before altering policies on cell phones.

8 Federal Issues for Churches to Watch

Just read this article about 8 federal issues for churches to watch. Included items are:

• Pastor Housing Allowance
• Health Care Reform
• Expiring Tax Deductions
• Worker Classification
• Fraud

Some of it is speculation right now, but some is reality. It's worth keeping an eye on it.

More Health Care Reform Learning

I attended a seminar on the Payment Protection and Affordable Care Act of 2010 yesterday. It was offered by our benefits provider The Healy Group and was very informative. If you have the opportunity to attend a seminar to help explain what's contained in the 2,400 page bill, I recommend it. Some things I learned:

• To keep health insurance coverage "as is" or "grandfathered" the coverage as of March 23, 2010 must be documented. In addition all changes to the plan after that date must also be documented. The reason is that there are several common changes that will cause a plan to lose "grandfathered" status like cutting or reducing benefits, significantly raising coinsurance, co-payments, deductibles, lowering employer contributions, and changing insurance carriers.
• For plan years after September 2010, insurers are no longer able to refuse or limit coverage for children with pre-existing conditions. Children up to age 26 will be allowed to stay on their parents' insurance plan.
• A new tax of 10% was added to tanning services starting July 2010.
• As of June 2010 a new high-risk pool for people with pre-existing conditions who haven't had insurance for at least 6 months was created.
• There is a small business tax credit available for small businesses.
• Starting in 2011, over the counter drugs like aspirin or claritin will no longer be reimburseable from an HSA/FSA/HRA account.
• In 2011, The excise tax on non-qualified distributions from an HSA increases from 10% to 20%.
• In 2011, Employers are required to report on Form W-2 the aggregate cost of health coverage provided to employees in 2011.

New 1099 Rules in Health Care Legislation

I may be behind the curve, but I just learned about this in a class I attended yesterday. It seems that there are new 1099 reporting rules buried in the 2,400 page health care legislation that was passed earlier this year.

These new 1099 rules, if not repealed, will go into effect in January 1, 2012 and will require reporting payments of more that $600 to all vendors not just independent contractors. This will also require collecting TINs from all vendors.

The net effect will be that it will require more time, cost, and effort to collect TINs from all vendors as well as more time and effort preparing 1099s. For example, we normally do a handful of 1099s for independent contractors each year. After 2012, we'll have to prepare several hundred 1099s each year.