• Insurance companies would be hit with a 35% excise tax on gold plated policies offered by firms (policies valued above $8,000 for singles and $21,000 for families). Firms that self-insure would pay this excise tax as well. Critics say this excise tax would hit union workers the hardest, as they generally have the best health care plans.
• Individuals who do not have health insurance plans would pay a tax every year. $950 for singles and up to $3,800 for families. Singles at poverty level would be hit with a $750 annual tax. Families at the poverty level would be hit with a $1,500 annual tax.
• Businesses would pay a penalty if they do not offer employer health insurance coverage for their workers. This penalty is capped at $400 times the number of company employees. Baucus would give small firms (25 or fewer employees) a tax credit of up to 35% of their health premium costs for 2011 and 2012.
• The Baucus plan would cap health savings account ("HSA") contributions at $2,000 per year beginning in 2013 and would disallow the use of HSA funds to pay for prescriptions

Roth IRA Strategy:
Currently, individuals wishing to contribute to Roth IRAs are prohibited from making contributions if their adjusted gross income ("AGI") exceeds $176,000 (marrieds) and $120,000 (singles). In 2010, this AGI limitation goes away. The strategy for 2009 for those not enrolled in any retirement plans, is to contribute to a non-deductible traditional IRA and convert this IRA to a Roth IRA and pay tax only on the earnings.

Tax Exempt Application Fees Increasing:
Effective January 3, 2010, applications for a determination letter from the IRS to be a tax exempt organization are increasing to $400 for organizations with $10,000 or less in gross receipts over a four-year period. This is an increase of $100. Those with gross receipts over $10,000, will pay $850, up from $750. However, the IRS is implementing an on-line application process which will reduce the fee to just $200, regardless of the amount of gross receipts.

Federal Contractor Worker Verification Requirements:
Federal contracts over $100,000 or lasting more than 120 days and signed after Sept. 7, 2009 will require contractors must use the Social Security database to verify that their employees are eligible to work in the U.S. Contractors who have never used the electronic system before must enroll in the verification program within 30 days after the contract is awarded. Then they have 90 days to begin the verification process for all existing workers.

IRS Updating Regulations on Tax Treatment of Damage Awards:
Only damages for physical injuries or physical sickness will be nontaxable with two exceptions: 
1. Payments for mental anguish arising from physical injuries and 
2. Reimbursements for medical treatment of emotional distress.

Retirement Plan Changes for 2010:
Lower 2009 inflation means a lower employee contribution amount. Retirement plans will be required to change their plans to incorporate the lower inflation-adjusted contributions and payin caps.

Post Office:
Expect Saturday delivery of mail to end beginning in 2011.

China Economy to Grow 8-9% in 2010:
Why? China is rapidly shifting from an Agrarian economy to an industrial economy thanks to lower taxes, privatization and an end to central planning of its economy. Their model? The U.S. capitalist economic model which includes the priority for private ownership. It is ironic that as China is introducing many U.S. capitalist ideals, the U.s. is introducing many European socialist ideals. As China moves toward the "old" U.S. capitalist system, the U.S. is moving away from its own system.