A number of provisions
in the 2010 health care reform legislation go into effect this year. Here are
some of the changes that could affect you.
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 do your 2013 tax planning. For more information and
planning assistance, contact our office.
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