By now of course you've heard that the U.S. Supreme Court
has upheld the key provisions of the Affordable Care Act, or
"Obamacare." In an unexpected
twist, the Court ruled that the controversial individual mandate is
constitutional, but under the government's power to tax, rather than to
regulate commerce.
We don't need to go into the details of the ruling itself
-- just turn on your television, and somewhere, somebody is opining on it right
now! But we do want to remind you the
Court's decision means several new taxes will go into effect as
scheduled:
• On January 1, 2013, the Medicare tax will go
up by 0.9% for individuals earning over $200,000 ($250,000 for joint filers,
$125,000 for married individuals filing separately).
• Also on January 1, there will be a new
"Unearned Income Medicare Contribution" of 3.8% on investment income,
for those earning more than $200,000 ($250,000 for joint filers).
• Beginning on January 1, 2014, there will be
a new $2,500 limit on tax-free contributions to flexible spending accounts, and
employers with more than 50 employees will face a penalty of $2,000 per
employee for not offering health insurance to full-time employees.
• Finally, the threshold for deducting medical
and dental expenses rises from 7.5% of adjusted gross income to 10%. This will make these expenses even harder to
deduct without help from advanced strategies like Health Savings Accounts or
Medical Expense Reimbursement Plans.
So, while the constitutional issues may be settled,
several planning challenges certainly remain.
We'll be following developments carefully in order to help you navigate
these new challenges. If you have any
questions, don't hesitate to call us at 217-241-4597.
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