What ObamaCare Means for Your Taxes

 

This SmartMoney article provides a nice overview on how the new ObamaCare law may affect your taxes beginning in 2013.  The article is summarized below.

Medicare Tax

Starting in 2013, an extra 0.9% Medicare tax will be charged on: (1) salary and/or SE income above $200,000 for an unmarried individual, (2) combined salary and/or SE income above $250,000 for a married joint-filing couple, and (3) salary and/or SE income above $125,000 for those who use married filing separate status. For self-employed individuals, the additional 0.9% Medicare tax hit will come in the form of a higher SE bill.

Medicare Tax on Investment Income

Starting in 2013, the maximum rate on long-term gains is scheduled to go up to 20% and the maximum rate on dividends is scheduled to increase to 39.6% as the so-called Bush tax cuts expire.  Also starting in 2013, all or part of the net investment income, including long-term capital gains and dividends, collected by higher-income folks can get socked with an additional 3.8% “Medicare contribution tax.”

$2,500 Cap on Health-Care FSA Contributions

Starting in 2013, the maximum annual FSA contribution for each employee will be capped at $2,500.

Higher Threshold for Itemized Medical Expense Deductions

Now, you can claim an itemized deduction for medical expenses paid for you, your spouse, and your dependents, to the extent the expenses exceed 7.5% of AGI. Starting in 2013, the hurdle is raised to 10% of AGI.

For additional information, this SmartMoney article provides additional insight.

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