With President Trump churning out orders fast and furiously (read up on all that’s happened in his first week alone here), change has been in no short order in recent days, but one thing that has, for the most part, remained largely the same — for now — appears to be Obamacare.
Ironically, President Trump’s first order of business was “to seek the prompt repeal of the Patient Protection and Affordable Care Act,” with plans announced Thursday to nix all advertising for the program in the final days of its enrollment period. As of Friday, however, he seems to have had a change of heart, at least with regard to the ads.
According to Health and Human Service officials via Politico, the administration wasn’t able to pull out of radio and television advertising that the Obama administration had paid for through the end of the month (AKA the last day for coverage enrollment through the program), although $4-5 million was cut from advertising through other mediums, with funds set to be returned to the US treasury.
Advertising wasn’t the new administration’s only concern, however: The Washington Post reports that a recording of a closed-door meeting discussing a repeal of the Affordable Care Act revealed trepidation from even Republican lawmakers, who worried over how they might implement a replacement plan by repeal time, how to keep the health insurance market from crashing and even how to cope with the social ramifications that would result from defunding Planned Parenthood (which singer Halsey just made a sizeable donation to).
The latter was reportedly addressed by NY House Representative John Faso, who said, “We are just walking into a gigantic political trap if we go down this path of sticking Planned Parenthood in the health insurance bill…If you want to do it somewhere else, I have no problem, but I think we are creating a political minefield for ourselves — House and Senate. He added, “Health insurance is going to be tough enough for us to deal with without having millions of people on social media come to Planned Parenthood’s defense and sending hundreds of thousands of new donors to the Democratic Senate and Democratic congressional campaign committees. So I would just urge us to rethink this.”
With no word yet on whether or not states will be able to keep up expanded Medicaid coverage (which an estimated 20 million Americans are currently insured under through the ACA) or overhaul it in its entirety, others, like New Jersey Rep Tom MacArhur, were more than a little concerned about the potential implications of acting too rashly there, as well. “We’re telling those people that we’re not going to pull the rug out from under them, and if we do this too fast, we are in fact going to pull the rug out from under them,” he said.
California Representative Tom McClintok then pointed out the obvious — that whatever moves are made will likely define the administration, and thus shouldn’t be taken lightly. “We’d better be sure we’re prepared to live with the market we’ve created. That’s going to be called Trumpcare. Republicans will own that lock, stock and barrel, and we’ll be judged in the election less than two years away,” he fretted.
A good point, sir. A very good point, indeed.
While things are still very much up in the air, it’s comforting to know that they are, at least, acknowledging concerns and giving them thought.
How do you think the government should handle the replacement of Obamacare? Share @BritandCo.
(h/t Politico, photos via J. Scott Applewhite/Andalou Agency, Oliver Douliery Saul Loeb/Getty)
Welcome to Selfmade Finance School, our new money series with Block Advisors to help small business owners with their tax, bookkeeping, and payroll needs year-round. This week, we explore the tax implications of bringing family members into your business.
The question for today is this: Does hiring your family members make sense for your business? Let me be clear. This is not a piece about whether hiring your family members makes sense for your relationships with those family members. As someone who is part of a family business, I could fill up a lot more than 600 words on my opinions about that. For today's purposes, we focus on whether it makes sense from an overall "good business and tax implication" perspective. As it turns out, there is a decent amount of tax nuance when it comes to employing your family. Let's break it down based on relationship to the employee:
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Spouses Who Are In Business Together
Personally, if I had to be in business with my husband, it would not go well. However, many couples build viable, strong businesses together and I say, good for them! Depending on how you have your business entity structured, it will make a big difference on the tax treatment of you and your spouse working as partners. Because a business jointly owned and operated by a married couple is generally treated as a partnership for Federal tax purposes, the spouses must comply with filing and record keeping requirements imposed on partnerships and their partners. The election to file two Schedule C (Form 1040) forms, (one for each spouse) permits certain married co-owners to avoid filing partnership returns, provided that each spouse separately reports a share of all the businesses' items of income, gain, loss, deduction, and credit. Under the election, both spouses will be subject to self-employment tax and on net earnings from self-employment and receive credit for Social Security earnings.
One Spouse Employs Another
If you have a dynamic where your spouse is an employee of your business, then your spouse's wages are subject to income tax withholding, Social Security and Medicare taxes. If you are self-employed (not a corporation or a partnership), your spouse's pay does not have to be included in your federal unemployment tax account (FUTA) contributions and payments. However, if your business is a corporation or a partnership you must include that spouse's pay in your unemployment tax contribution calculation.
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You Employ Your Child
First, let's be clear. I work in my family business, but I am an adult, so I am treated just like a normal employee. However, if you, for example, run a family restaurant and want to hire your children under 18 to work for you, there are some tax benefits. But first, you should check with your state for rules on how many hours minors can work (in non-agricultural jobs) and reference the Fair Labor Standards Act for information on limitations on the kinds of work children can perform.
"This is an often overlooked or under-utilized strategy. Paying your children for true services they provide in your business can be a powerful tax-saving tool," says Cathi Reed, Block Advisors Regional Director. "If you are a sole-proprietorship or single member LLC, and the child is less than 18 years of age, the business is not required to withhold FICA or payroll taxes. The child can use his or her standard deduction against income you pay."
You Hire Your Parent
Oh dear. If you are brave enough to do this, know that you will need to pay Social Security and Medicare taxes on your parent's wages and make the appropriate withholdings, but you don't have to pay unemployment taxes. Now all you have to do is convince your parent that you are the boss. Have fun with that!
Is Hiring Family Members Worth It For The Tax Benefits?
"There are some positive tax advantages to hiring family members. It's important to treat a family member like any other employee. Hiring your children can result in substantial savings for businesses. Make sure your child has real, age-appropriate work to do and a reasonable pay rate, comparable to other employees. Consult with a Block Advisors small business certified tax pro to ensure that you are complying with all requirements," advises Reed. "Block Advisors, a team within H&R Block, is dedicated to meeting the tax, bookkeeping and payroll needs of small business owners year-round. To start working with the tax experts at Block Advisors, visit blockadvisors.com."
In my opinion, you should not hire a family member solely because of the tax benefits. You should always hire based on whether that person is right for the job and keep in mind how this hire could materially impact your relationship with that person and others in your family. Finally, as I mentioned, make sure you have a tax professional on your team when making these determinations. As you can see, things can get a little tricky!
*All details were sourced from IRS.gov and blockadvisors.com
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regards to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. O'Keeffe Financial Partners and any other entity listed herein is not affiliated with Kestra IS or Kestra AS Investor Disclosures: https://bit.ly/KF-Disclosures