Obamacare and Your Taxes for 2013

All Rochester accounting firms including Rizzo & DiGiacco have been well prepared for the implementation of the Affordable Care Act, also known as Obamacare, as soon as it was signed into law on 23 March 2010; it’s their job, after all. But it is also the job of taxpayers such as yourself to anticipate Obamacare’s impact on your taxes for 2013.
 
Here then are the most important aspects of Obamacare as its provisions apply to tax planning goals. If you have any questions, concerns and issues about the law’s impact on your taxes, you should get it right from the horse’s mouth, so to speak – obviously the best Rochester accountant from our company! (Note: We also offer CFO outsourcing services for businesses)

Medicare Payroll Tax

 

In case it has escaped your attention, Medicare has faced and continues to face major financial concerns brought by several factors including the budget crisis and the national recession. The Obamacare provision regarding the payment of the 2.5% Medicare payroll tax on earnings above the stated thresholds - $200,000 for single taxpayers and $250,000 for married couples annually – is designed as part of the plan to keep the Medicare program running as well as it should be.

Obviously, the tax will affect high-income earning households. If you belong to the category, you can expect your Rochester taxes to have substantial differences in 2013 than in 2012 because of it.
Note: Your Rochester CPA will fill in the tax under its official name of Medical Hospital Insurance (Part A) Tax for the Medicare Hospital Insurance (HI) Trust Fund. Look for it for your enlightenment’s sake.

Unearned Income Tax

Yet another way that Obamacare will affect taxes in 2013 is the unearned income tax. Keep in mind that the tax will apply to a wide range of investments and their income including but not limited to dividends on stocks, interests on deposits, and rent revenue.

Individuals with several investments in their portfolios are then well advised to get on board the best Rochester consulting firm’s roster of clients so as not to overlook items wherein unearned income tax may be levied. The more accurate your tax returns in this regard, the better your chances for staying on the right side of the law - and the accountants and tax planners of Rizzo & DiGiacco will be of valuable assistance on this matter.

As with the Medicare payroll tax, the unearned income tax will affect high-income households. Single taxpayers earning more than $200,000 and married couples earning more than $250,000 per year will be subject to a surtax of 3.8% prior to deductions.

Cadillac Health Insurance Plan Tax

Although the tax will be imposed in 2018, Americans are well advised to start looking for affordable health insurance plans before the tax takes effect. The Cadillac health insurance plan tax refers to the steep 40% penalty for individuals enrolled in health insurance policies costing $10,200 or higher and for families with health insurance plans costing $27,500 or higher.

The bottom line: Be proactive by discussing the impact of Obamacare on your healthcare plans and your tax plans with your accountant and/or tax planner.