Will healthcare reform affect my taxes?

Changes in national healthcare may have you wondering how your taxes will change—if at all—when you file this year. Many of the changes have only gone into effect for the 2013 tax year, so you may see a difference in your tax return this April. Below is a look at the specific taxes that have been enacted with healthcare reform and may affect you this year.

Medicare tax on wages

Anyone with an income over $200,000, joint income over $250,000, or joint payers with incomes exceeding $125

Tax on unearned income

Investment income for individuals, estates and trusts will have a 3.8% tax beginning in 2013. Adjustments may be made for individuals and joint filers depending on the modified adjusted gross income amount that exceeds the same threshold as the Medicare tax on wages. Estates and trusts are taxed with different calculations.

Itemized deduction for medical expenses

There will be significant adjustments for itemized deduction of unreimbursed medical expenses, as the threshold for these deductions will increase from 7.5% to 10% of gross adjusted income. Individuals under the age of 65 will see these changes in 2013 while older individuals will remain at 7.5% until 2017.

Insurance mandate tax

Beginning in 2014, any non-exempted individual without qualified health insurance will have to pay a minimum tax of $95 to $695 with adjustments for inflation thereafter. Employers will be subject to penalty taxes as well if they do not provide eligible employees with health insurance coverage within certain parameters.

For a closer look at the healthcare reform taxes that could impact you, contact a tax professional at Upstream Investment Partners at 630-599-7115. Upstream can provide you with the professional guidance and resources you need to prepare for the current tax season and plan for your financial future.  You can also take advantage of their $79 tax preparation offer for people age 50 and over.   

 

Upstream Investment Partners is independently owned and operated.  Securities offered through Sigma Financial Corporation, Member FINRA/SIPC.  Investment Advisory Services offered through Sigma Planning Corporation, a Registered Investment Advisor.  Upstream Investment partners is located at 2443 Warrenville Road Suite 115, Lisle, IL 60532.

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