Recent focus has been on the fiscal cliff and the tax
issues connected with it. But there are tax changes
coming from another direction: the 2010 health care
reform legislation.
Here are some of the changes that could affect you this
year.
* Medical expense itemized deduction. The 7.5% income
threshold for
deducting unreimbursed medical expenses
increases to 10% for
taxpayers under age 65. Those 65
and older may
continue to use the 7.5% threshold
through the year
2016.
* FSA contributions. The limit on contributions to
health care flexible
spending accounts (FSAs) is
lowered to $2,500.
* Medicare tax on earned income. A 0.9% Medicare surtax
will be imposed on
wages and self-employment income
exceeding $200,000
for singles and $250,000 for
married taxpayers
filing a joint return.
* New Medicare tax on unearned income. A new 3.8%
Medicare tax will be
imposed on unearned income
(investment income
such as interest, dividends, and
capital gains) for
single taxpayers with adjusted
gross income
exceeding $200,000 and for couples with
adjusted gross
income exceeding $250,000.
These changes may affect your 2013 withholding or
quarterly estimated tax payments. Take the changes into
account as you begin your 2013 tax planning. For more
information and planning assistance, contact our office.
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