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8 - March 23, 2012 | Hudson - Litchfield News HPD Awards- continued from front page

Piece of the Pie Maintaining Your

The Value of Fringe Benefits- Part 2 W.F.Boutin EA - Total Tax Solutions LLC

Two weeks ago, we discussed the advantage of deferred compensa- tion plans such as the 401K; how it affects the tax return as well as the tax saving benefits of this investment. This week, we will discuss the most popular menu selection found under most employers’ cafeteria/section 125 plans, accident and health insurance. Many taxpayers have the opportunity to receive their health

insurance plans through the workplace. Usually these plans are less expensive because of the large pool of employees covered under a single contract. Some employers also pay part of these premiums, making it more attractive to the employee. In today’s economy, we all know that medical coverage does not come cheap, with premiums steadily on the rise every new calendar year. However most taxpayers do take this benefit for granted and really do not realize the tax savings they are receiving through such plans. Let’s compare the out of pocket costs for a person who gets their insurance through the workplace as opposed to an individual who must purchase a plan on their own. Both individuals pay $5000 a year for premiums and both are in the 15% tax bracket. The taxpayer receiving this benefit through the workplace most probably is receiving better coverage for their dollar and their cost “out of pocket” is exactly $5000 for this plan. Their AGI and taxable income is also affected by this pre-tax benefit, possibly allowing them to capitalize on other tax deductions/credits on their income tax return. The taxpayer who has purchased this coverage on their own with after tax money must earn approximately $6123 to “take home” the $5000 to pay these premiums. The difference is the cost of federal, Social Security/Medicare tax on the income. (Additional savings occur if the taxpayer is paying state taxes as well on their earned income.) If they itemize they will be able to list these premiums as medical expenses since they are paid with after tax money, but this deduction is subject to 7.5% of their AGI before the first dollar is deductible. Even with insurance coverage, most individuals have additional “out-of-pocket” medical expenses. They may be in the form of co-pays per doctor visit or prescriptions, or payment for non covered expenses like vision wear. If a taxpayer itemizes, these items are deductible on the SCH A, but once again, subject to the 7.5% of the AGI. Many who itemize do not benefit from these out-of-pocket costs. Some employers include within their accident and health plans, a

savings account that can be set aside from the employee’s pay on a pre-tax basis to cover these types of out-of-pocket expenses. (NOTE: These plans no longer allow for reimbursement for some over the counter drugs starting in 2011). In many cases, this type of plan is beneficial to all taxpayers, but there is a slight catch. Usually the dollar amounts that are set aside for these costs are lost at the end of the calendar year, if not disbursed. Therefore, special planning is required to not set aside more than you will utilize. Contributions to such a plan realize a tax savings the same as medical insurance, that is, no Social Security/Medicare or federal taxes are withheld on these accounts, once again lowering your AGI and taxable income on the return. Next week: State of NH Returns!

Have a tax question? E-mail About Total Tax Solutions: W.F. Boutin EA registered Total Tax Solutions in the State of NH as a LLC in the summer of 2006 after 10 years experience working for a major tax preparation company and 8 years of teaching various tax courses. The company mission is to deliver an excellent customer service experience year around, to offer knowledgeable advice so that clients can make informed decisions regarding their financial future, and to provide this service with integrity, confidence and professionalism.

Officer Rachelle Megowen receives her award from Chief Lavoie

• The Life Saving with Valor Commendation Award is presented to those who, with total disregard for their personal safety, save or attempt to save a life:

Master Patrol Officer Alan Marcotte responded to a call for service for a reported suicidal subject on October 28, 2011, entering the Merrimack River in an attempt to save a life. • The Life Saving Commendation Award for performing CPR or other life saving measure to save or attempt to save a person’ life, demonstrating dedication to preserve life was presented to: Master Patrol Officer Thomas Scotti and Officer John Mirabella responded to a call for a medical emergency on January 27, 2011.

On February 27, 2011, Master Patrol Officer James Connor was the first responder at the scene of a possible heart attack.

Officer James Connor about to recieve his Life Saving Commendation Award

Officer Eric Ferreira responded to a report of an unresponsive subject in full cardiac arrest on July 12, 2011. Master Patrol Officer James Stys was the first responder at the scene of an unresponsive subject on august 1, 2011. On January 16, 2012,

Telecommunications Technician Angela Allen, Master Patrol Officer Thomas Scott, Sergeant Donna Briggs and Officer Daniel Conley were instrumental in saving the life of an unresponsive subject during a routine visit to the Hudson Police Department. • The Chief’s Achievement Award is presented to employees for highly professional conduct that brings great credit upon themselves and the Hudson

Officer Eric Ferreira poses with Chief Lavoie with his Life Saving Commendation Award

Police Department: Master Patrol Officer Rachelle Megowen

received the Chief’s Achievement Award for her dedication and commitment to her duties and responsibilities as a School Resource Officer since 2008.

Week 9 3-23-12

Master Patrol Officer Tomas Scotti and Officer John Mirabella are congratulated

Telecommunications Technician Angela Allen, Master Patrol Officer Tomas Scott , and Sergeant Donna Briggs receive their commendations

Polartec- continued from front page

Congressman Bass with many Polartec employees

Plant Manager Clinton Rowe quickly and loudly explained, adjusting for machine noise, that the Hudson facility product 2.1 million yards of material last year explaining40 people, 24 hours a day, six days a week. While the new high tech product is currently under Your Hometown Internet Address

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contract to the U.S. military and used mostly by Special Forces, David Costello, Managing Director for ADS Ventures, a communications firm, and a former member of Polartec management, explained how the new product works in a simple analogy: The fibers react to temperature. When hot they lay flat allowing your body heat to exit allowing you to cool; when hot they stand on end to make air spaces that trap your body heat. Congressman Bass spoke to the employees gathered in their

lunch room, touching mostly on military contacts and his hope that a budget will be passed, that he is concerned with the partisan stalemate where automatic spending cuts would reduce military appropriations. While only the fabric is woven here in Hudson, when you see pictures of U.S. Special Forces, wonder if Hudson had a hand in making what they are wearing.

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