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Will Your Executive Compensation be Affected by the additional Medicare Tax?

Posted by Keith Huggett on Thu, Oct 29, 2015 @ 09:10 AM

canstockphoto7524517The additional Medicare tax and net investment income tax (NIIT) apply when certain income exceeds the applicable threshold: $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for other taxpayers.

The following types of executive compensation could be subject to the 0.9% additional Medicare tax if your earned income exceeds the applicable threshold:

  • Fair market value (FMV) of restricted stock once the stock is no longer subject to risk of forfeiture or it’s sold
  • FMV of restricted stock when it’s awarded if you make a Section 83(b) election
  • Bargain element of nonqualified stock options when exercised
  • Nonqualified deferred compensation once the services have been performed and there’s no longer a substantial risk of forfeiture

And the following types of gains from exec comp will be included in net investment income and could be subject to the 3.8% NIIT if your modified adjusted gross income (MAGI) exceeds the applicable threshold:

  • Gain on the sale of restricted stock if you’ve made the Sec. 83(b) election
  • Gain on the sale of stock from an incentive stock option exercise if you meet the holding requirements

Concerned about how your exec comp will be taxed? Please contact us. We can help you assess the potential tax impact and implement strategies to reduce it.

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Topics: affordable care act, Obamacare, Healthcare tax

2014 Taxes - New Healthcare Tax Form

Posted by Allyson Huggett on Wed, Sep 3, 2014 @ 07:09 AM

New Forms May Holdup Your 2014 Tax Refund

form 1095-AAuthor: Keith Huggett

The IRS has added a new form to be completed for tax year 2014.  If you were successful in signing up for healthcare benefits required by the Affordable Care Act, you are now required to send in form 1095-A, which you can get from the Health Insurance Marketplace. Please be aware that this example is a draft, not the form to file.  Form 1095-A  will list all of the individuals in your household who receive the benefits and how much the government has spent subsidizing their premiums.

The Health and Human Services Department (HHSD) will be in charge of issuing the forms.  The lack of confidence in the HHSD primarily stems from the difficulties associated with the ACA website. Justifiably, tax professionals are concerned about their ability to have all the forms out and in the hands of the millions of Americans by the January 31st deadline.

1095-A provides information you need to complete Form 8962, Premium Tax Credit (PTC). You must complete form 8962 and attach it to your tax return if you wish to claim the Premium Tax Credit or if you received premium assistance through advance credit payments. If you or your family members enrolled in more than one qualified insurance plan then you will receive a Form 1095-A for each plan.


States who operate their own health insurance marketplaces are also required to issue their own forms to those receiving their benefits. Though the biggest responsibility falls on the shoulders of the HHSD to get the forms to the individuals residing in the 36 states that it serves.

Remember, this form only applies to those Americans who were able to sign up for health insurance through the healthcare exchange.  If you obtained your health insurance elsewhere, this does not apply to you.  If you have any questions regarding this form, or your tax return, please contact the qualified tax professionals at The Tax Office, Inc.

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Topics: Keith Huggett, tax forms, affordable care act

The Affordable Care Act & Your Business

Posted by Keith Huggett on Tue, May 14, 2013 @ 13:05 PM

Does it Affect Me?

affordable care actAuthor: Keith Huggett 

The Affordable Care Act is going to affect everyone in some way. Does it affect you? The ultimate answer to that question is yes. Is it going to affect your business? It depends. What does it depend on? The answer to that quite honestly is the number of full time equivalent employees you have. A full time employee is any employee who works 30 hours a week or more. Seasonal employees become full time employees after 120 days. 2013 is the base year for determining the employee count for 2014.

The important number for you to consider as a business revolves around the number of employees you have. Do you have more than 50 employees? If not, than the healthcare act is not a factor for you. If you do not have more than 50 employees you are exempt from the fines attached to the healthcare act. Businesses that do not offer their employees health insurance will be fined $2000 for every full time employee that received a government subsidy for purchasing coverage through an exchange, excluding the first 30 employees.

For a more in depth look at the Affordable Care Act, please download our white paper, Healthcare Answers for Today's Questions on our website. 

Should you have any questions regarding the Affordable Care Act, and it's affect on your business, please contact us. The Tax Office, Inc. and it's team of specialists are here to answer your questions.

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Topics: Keith Huggett, affordable care act

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