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Washington Watch - March 25, 2009

Wednesday, March 25, 2009

Health Care Affordability Proposals Stress Options, Transparency
The House Committee on Energy and Commerce Subcommittee on Health recently held a hearing entitled “Making Health Care Work for American Families: Ensuring Affordable Coverage.”

The lack of affordability in health coverage was repeated by committee members and witnesses alike. “First and foremost, health insurance has become too expensive,” said Chairman Frank Pallone (D-N.J.). “As health insurance premiums continue to outpace wages every year, people can no longer expect to pay a reasonable price for health coverage.”

Witnesses before the committee suggested a range of ideas for reform, with many suggesting that allowing consumers to choose between many private and public insurance options and increasing price transparency would most improve affordability. Other ideas included connector plans (such as those in Massachusetts), reducing administrative costs, and looking at total health spending, not just premiums.

Dr. Uwe E. Reinhardt, Professor of Political Economy, Economics and Public Affairs at Princeton University, testified that if the current system remains in place, soon voters and their representatives will have to choose between raising taxes on the top half of the income distribution to subsidize health care for households in the lower half of the income distribution, or a gradual restructuring of the health care system into a tiered system that rations health care by income level. Dr. Reinhardt argued that the only way to avoid these outcomes is to move away from the employer-based system, and added that self-employed individuals should have the same benefits as those who receive health coverage through their employers.

 


NASE Takes Tax Advice To Micro-Business Owners’ Communities
When it comes to navigating business taxes, micro-business owners need easy-to-understand, reliable resources that can help them file. That's why the National Association for the Self-Employed is bringing tax advice to members in their own communities.

Following the success of the Tax Seminars with National Tax Advisor Keith Hall in 2007 and 2008, the NASE is traveling across the country this March to share micro-business tax strategies and to bring together fellow NASE Members.

Topics include:
  • Finding hidden deductions
  • Employing a spouse or child 
  • Learning Tax Code changes for 2008 
  • And more
Join the NASE for a networking breakfast, and learn valuable tax strategies before filing. This small-group, two-hour seminar offers close access to a CPA specializing in taxes affecting the self-employed.

Register now at www.nase.org/taxseminars.

 


Net Operating Loss Carryback and Other Business Tax Provisions
Small businesses with deductions exceeding their income in 2008 can use a new net operating loss tax provision in the American Recovery and Reinvestment Act to get a refund of taxes paid over the past five years instead of the usual two.

To accommodate the change in tax law, the IRS has updated the instructions for Form 1045 and Form 1139, which small businesses will use to take advantage of the carryback provision.

An IRS news release and question-and-answer document have more information on the net operating loss carryback provision.

More Help for Small Business
The Recovery Act also includes the following business-related provisions:

  • Sec. 179 Deduction Increases to $250,000: An expanded Sec. 179 deduction allows small businesses to write off up to $250,000 of qualified investment in 2009.
  • Reduction of Estimated Tax Payments: Normally, small businesses have to pay 110 percent of their previous year’s taxes in estimated taxes. The Recovery Act permits small businesses to reduce their estimated payments to 90 percent of the previous year’s taxes.
  • Extension of Bonus Depreciation Deductions Through 2009: Bonus depreciation is extended through 2009, allowing businesses to take a larger tax deduction within the first year of a property’s purchase.
  • Capital Gains Tax Break for Investment in Small Business: Investors in small business who hold their investments for five years can exclude from taxation 75 percent of their capital gains.

Read more about the American Recovery and Reinvestment Act of 2009.

 


NASE Highlights Need For Comprehensive Health Reform
With over 60 percent of Americans living without health insurance coming from a family where the head of household works for a small business, the NASE announces its support of Cover the Uninsured Week, which runs through March 27, 2009. This year’s Cover the Uninsured Week will feature events across the country to inform Americans about the issue of the uninsured – who is affected, why they are uninsured, and the consequences of being uninsured.

According to a recent online poll by the NASE, one quarter of micro-business owners are currently uninsured, and almost three-quarters (71 percent) have been uninsured at some time. Cost seems to be the main barrier to insurance for the self-employed and micro-business owners, with 29 percent of currently uninsured respondents citing "cost/affordability" as the main reason they were without health insurance. Forty-four percent indicated that the main reason they had been uninsured at some point in time was because they were unable to afford premium costs.

While corporations are able to deduct health insurance premiums as a business expense and forego FICA (Social Security and Medicare) taxes on these expenses, the self-employed are not. The Equity for Our Nation's Self-Employed Act (H.R. 1470), introduced earlier this month, would eliminate this double digit disparity in the tax code, which inhibits the self-employed from receiving a full deduction for health insurance costs.

Read more about Cover the Uninsured Week at www.covertheuninsured.org.

Click here to find out more about the NASE legislative proposals on health care.

 




Lawmakers and media outlets across the country rely on and regularly cite the NASE as a source of small and micro-business expertise. Help the NASE make sure the micro-business perspective is heard by taking this month’s poll.

Click here to log-in and participate



Washington Watch Online
Visit NASE Advocacy to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business.