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Are you prepared for 2013?

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2013 Healthcare Reform

In just a few months starting in 2013, five major taxes will phase in. These taxes are part of the comprehensive health care reform package enacted by Congress in 2010. They are:

1) Medical device manufacturing tax – 2.3 percent tax on medical device makers will raise the price of (for example) every pacemaker, prosthetic limb, stent, and operating table.

2) High medical bills tax currently Americans deduct medical expenses as an itemized deduction to the extent the costs exceed 7.5 percent of one’s adjusted gross income. In 2013 the percentage will increase to 10 percent of adjusted gross income for taxpayers less than 65 years of age.

3) Flexible spending account cap flexible spending accounts will face a new federally imposed $2,500 annual cap. These pretax accounts, which currently have no federal limit, are used to purchase everything from contact lenses to children’s braces.

4) Surtax on investment income 3.8 percent tax on adjusted gross income applies to joint filers with AGI in excess of $250,000 and single filers with AGI in excess of $200,000.

5) Surtax on earned income 9 percent Medicare tax is levied against joint filers with wages above $250,000 and single filers with wages above $200,000. Also included are the earnings of self -employed sole proprietors.