• NASE Offers Health Care Tips To Women’s Business Association
• A Closer Look At Tax Gap Proposals
• Policymakers Tackle Plan For Uninsured Children

Policymakers Tackle Plan For Uninsured Children

Business owners and professionals gathered to hear tips from the National Association for the Self-Employed’s Kristie Darien, the executive director of the Washington D.C. legislative office. Darien answered questions on everything from cutting health care costs to the benefits of setting up health savings accounts. “If you don’t offer health insurance for your employees, contribute to and assist them in opening a tax-deferred account, such as a Health Savings Account, they can use for their health costs,” Darien said. “It’s a great way to do something for their health coverage if you cannot afford to pay for insurance.” A national survey conducted by the NASE in 2005 found that over two-thirds of micro-business owners say cost is their single most significant barrier to obtaining health insurance. It also found that nearly two in five people do not know where to find health coverage for themselves or their employees. NASE's Your Health, Your Choice program is part of an overall effort to fill the information void on health care for micro-businesses. For more information on assessing your health care needs and controlling soaring health care costs, visit http://www.MicroBusinessHealth.com. The event was sponsored by the National Association of Women Business Owners in Richmond, Virginia. To learn about other business networking events, go to http://NAWBO.org. A Closer Look At Tax Gap Proposals The Bush Administration recently released several plans to help the IRS close the nation’s $353 billion tax gap. The NASE has thoroughly reviewed those proposals to discover how they might impact our members. We feel that rather than continue to shift both the cost and overall burden of compliance to business owners already fulfilling their tax responsibilities, the IRS should focus on taxpayer compliance education, simplification of the current tax laws, and fair and balanced enforcement on those either unintentionally or willfully not complying with their tax liability. The Administration’s tax gap proposal expands information reporting requirements on multiple levels for numerous business taxpayers. While the NASE feels that access to information is beneficial, there needs to be a balance between the benefit with the burden and cost on the taxpayer. The NASE is promoting alternative, less burdensome ways to address the tax gap and tax compliance. A key element of the tax gap is the underreporting of income and concern of the accuracy of cash payments reported on tax returns, particularly amongst sole proprietors. The NASE recommends modifying the Form 1040 Schedule C form by altering line item 1 to request a separate line item for credit and debit card transactions and another line for check and cash transactions. Visibly requiring the taxpayer to list separately their transactions may trigger the necessity for them to incorporate them into their tax return. In Part 2 of Form 1040 Schedule C, line 11 allows sole proprietors to include and deduct the payments they made to contractors over the year. We recommend the inclusion of a check box accompanied by a statement indicating that they have complied with the 1099 filing reporting. If business taxpayers do not check the box, they are not allowed the deduction for contract labor. Additionally, we feel that it is essential to address those complicated and vague areas of the tax code such as worker classification (independent contractor versus employee) and uses of a home office. Simplification will go a long way to increase tax compliance. As the debate over these proposals continues, the NASE will continue to advocate on your behalf by supporting those that are fair and reasonable to address the issues of the tax gap and to increase tax compliance. For more detailed information, please read the NASE’s brief on Fairness in Tax Compliance on our Advocacy site, http://advocacy.nase.org. Policymakers Tackle Plan For Uninsured Children Democratic Rep. Rahm Emanuel of Illinois is leading a bipartisan effort to offer health insurance to more of the nation’s uninsured children. The current authorization for the State Children’s Health Insurance Program (SCHIP), which offers health coverage for families who do not qualify for Medicaid, is set to expire this fall. The $60 billion dollar plan intends to cover a greater number of low-income children with a tax credit to help families purchase health coverage. It will also offer increased funding for SCHIP and Medicaid, while providing federal funds to individual states that improve the existing infrastructure, which includes simplifying the enrollment process. President Bush proposed a $5 billion increase in funding for SCHIP. The House plan would offer an addition $50 billion to SCHIP and Medicaid for the next five years, as well as a $10 billion tax credit to assist some families in purchasing coverage. Rep. Emmanuel says the costs would be offset with a list of measures including closing the capital gains tax gap. “The NASE believes all children under the age of 18 should have access to health care,” said Kristie Darien, legislative director of the Washington D.C. office. “This issue is on the minds of many of our members who already struggle with the health care system.” For more information on the NASE's position on health care, go to http://advocacy.nase.org/. Visit http://coveringkidsandfamilies.org/ for more information on SCHIP initiatives and programs. Did You Know? The IRS currently offers a free electronic email service to provide tax information to the self-employed. Sign up to receive information about upcoming tax dates; what’s new on the IRS Web site; reminders and tips to assist with tax compliance; and IRS news releases and special announcements. Just visit http://www.irs.gov/businesses/small/content/0,,id=154826,00.html to subscribe.