On June 28, the Supreme Court ruled that the “Patient Protection and Affordable Care Act of 2010” was constitutional, including the provision in the law requiring individuals to have health insurance coverage starting in 2014.
Several provisions in the health care law had already gone into effect, and many new tax provisions are scheduled to take effect in 2013. These are the provisions you should factor into your tax planning for the rest of this year. A quick review of these tax provisions:
* Annual contributions to health flexible spending accounts (FSAs) will be limited to $2,500.
* The 7.5% income threshold for deducting unreimbursed medical expenses increases to 10% for those under age 65. Those 65 and older may continue to take an itemized deduction for medical expenses exceeding 7.5% of adjusted gross income through the year 2016.
* The payroll Medicare tax will increase from 1.45% of wages to 2.35% on amounts above $200,000 earned by individuals and above $250,000 earned by married couples filing joint returns.
* A new 3.8% Medicare tax will be imposed on unearned income for single taxpayers with income over $200,000 and married couples with income over $250,000.
Contact our office for tax planning guidance following this landmark Supreme Court decision.