Sending out an S.O.S., as a last resort...

[debee]

my bad. i had it backwards. duh. and i actually edited my earlier post too!

[Wantmypeace]

That makes sense. Yah, it's just too many numbers! CRAZINESS!

[debee]

I was on here all day, reading, reading, reading, and I have to stop doing that. Or at least to take a break now and then in order to do CPR on my braincells. Keep us all posted as to your developments, especially what the lawyers say in the upcoming meetings. Wishing you your peace.

[Wantmypeace]

I will absolutely keep everyone updated! I have learned so much here, and I want to return the favor. I spent yesterday on here all day, as well. Today, I will be heading to town for a while to get out of the "bankruptcy bubble"!

[Wantmypeace]

I posted this as a new post, but just in case, I wanted to add it here, as well:

So, my husband's been waiting on his payroll gal to let us know what his new gross and net income will be when we switch our family to his insurance. Well, this is what we found out:

The superintendent who was in the position before my husband set a "precedent" that all benefits are automatically "cashed out" for his position. This means that his "health benefit" (equal to about 11K) is simply added to his salary as income. IF he wants the health insurance, he has to "buy it back." The cost to do that is about 2335/mo for the top plan (which we need because of my and our son's health problems). So, his paycheck will look like this:

gross: 9835 (higher than the original 8750 I've been posting because the cash out benefits are added in now)
taxes: 710
retirement: 785
health fsa: 2335
net: 6005 (lower than the 6600-6800 I was estimating because the health insurance was much higher than I expected)

I don't know if this is good news or bad news! Will a trustee blow a gasket over a health insurance expense of 2335? It is real and true, and will be documented on all of our paystubs starting Jan 1st, but will it be allowed? It will certainly ensure that we pass the means test.

Any thoughts? Is this good or bad?

[keepmine]

It is what it is. Health insurance is an allowable expense and for a large family that has 2 members with pre-existing conditions it will be expensive.
Nothing the trustee can do as long as it's documented.
If he blows a gasket, just hope he has good health insurance.

[Pandora]

gross: 9835 (higher than the original 8750 I've been posting because the cash out benefits are added in now)
taxes: 710
retirement: 785
health fsa: 2335
net: 6005 (lower than the 6600-6800 I was estimating because the health insurance was much higher than I expected)

You need to refigure the taxes - at nearly 10K a month, you will definitely pay more than $710 in taxes. More liklihood of the 25% - 30% tax bracket: $2458 - $2950 on that income.

Here is a calculator to help you calculate areas on his payroll. Biggie will be if insurance comes out pre or post pay deduction. http://www.bankrate.com/calculators/...tor-taxes.aspx

[ccsjoe]

Wantmypeace,

On the health insurance, don't sweat it. You have a plausible justification for it. On the taxes, agree with Pandora that you need to recalculate.

[Wantmypeace]

I LIKE your answers! So, we need to increase the amount taken out for taxes, huh? We've had our exemptions at 8 because we ALWAYS get a tax refund, and we'd rather have the money now and not lend it to the government. However, now that we won't have a mortgage interest deduction, maybe we should drop it down. Hadn't thought about that! I will use the calculator you suggested. Thanks!

[momofthree]

With large tax deductible medical expenses (insurance alone at $28k/year puts them over the $8850 minimum + $5000 out-of-pocket = HUGE deduction!), 3 kids, and most likely a fairly high daycare expense, they probably won't have to increase the taxes by much. They'll probably be able to make it down into the 15% tax bracket (below $68k taxable income). $118k income - $25k medical - $18250 exemptions - $1200 tithe = $73550. They'd only need an extra $5550 in deductions to get down into the 15% tax bracket, and lets not forget the $3000 credit you get for having 3 kids (LOVE THAT, saves us every year, lol). Regardless though, $710 probably isn't enough, but an extra $100-$150 would probably do the trick. ;)

[Wantmypeace]

Good point! I will run the numbers through Turbo Tax to determine exactly how much we need to increase our taxes. Thanks!

[Pandora]

Good catch Momofthree - I hadnt factored that in.

Wantmypeace - I dont know if this will apply to you or not, but for others that may not be aware, there is a clause that states if you are in an employee sponsored plan (as in you pay a portion and your employer pays a portion) and benefits are taken out pre-tax you cannot deduct them. It has to be post tax.

Also flexible spending accounts cannot be included either. They have us coming and going with health insurance premiums - even if you get reimbursed more than your medical expenses, sometimes that is counted as income.

I think all health insurance premiums or any portion thereof should be given back to everyone. They vetch about people not being able to have healthcare due to costs, well then..give it back to us as a credit in full along with any additional monies we spent out of pocket. Annoying..

[Wantmypeace]

So, in our case, the employer isn't paying any. We pay the whole thing. BUT, we have it set up so the amount comes out of the check pre-tax and goes into an FSA, and then the payroll gal deducts it from the FSA to "buy" the insurance. Are you saying that because it goes into an FSA pre-tax and then is paid, it won't count toward the means test? This is exactly how our retirement works, and it is counted, so I'm confused.

[debee]

Pandora - where is that clause about health insurance having to be after-tax? I'd like to read up on that. Thanks

[debee]

Your FSA is just a piggybank that you draw on to pay your actual medical bills. We have one too, but we haven't listed it anywhere on our 'trial run' paperwork. We have listed our actual medical expenses instead as in our case they exceed the FSA deduction amount.