Now that healthcare reform is the law of the land, its time to think about how it will affect your taxes. Whether your income is high, low or in-between, everyone will be affected in some way. Heres a year-by-year breakdown of whats on the horizon and details about how the new law may change the amount of tax you pay: 2013 This is an important year for joint filers with incomes over $250,000 and single filers with incomes over $200,000. These taxpayers will now be subject to two taxes: •Medicare tax on earned income: The tax will increase from 1.45% to 2.35%, but only on income beyond the $200,000/$250,000 thresholds. •Medicare tax on investment income: This new 3.8% tax will be assessed on interest, dividends, capital gains, rent and royalty income. Investment income from retirement accounts is not subject to the tax. Taxpayers at any income level could be subject to these changes: •Cap on flexible spending account (FSA) contributions: Previously, employers could set the limit on contributions to FSAs. Many opted for caps as high as $5,000. In 2013, a cap of $2,500 goes into effect. Anything above the cap becomes part of your taxable income. The cap will rise each year as the cost-of-living increases. •New limits on medical deductions: Current law allows filers who itemize their deductions to deduct out-of-pocket medical expenses that exceed 7.5% of their income. In 2013, expenses must exceed 10% for filers under age 65. (If you or your spouse is over 65, the law goes into effect More are coming down the road. Remember to check out our firm periodically for the latest news on those that may affect your income taxes. Questions? Call us 240.463.9019
Posted on: Thu, 07 Nov 2013 19:46:58 +0000
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