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.

Avoid Rookie Mistakes When Selecting CFO Outsourcing Services

The company you choose to handle your CFO outsourcing is going to impact your financial management system. Their goal will be to ensure that your company’s performance improves, while helping to better manage operations and funding. It is with this in mind that you should look to working with a Rochester consulting firm and ensure that they are going to be qualified to help guide you through this entire process. This may take some time, but in the end, it will help you to avoid serious rookie mistakes.

This begins by understanding that good companies will not require you to sign a long term contract with the CFO outsourcing company. While there may be documentation that you sign to utilize the services of this corporation, you shouldn’t be required to commit to a specific amount of time. After all, you may only need the services of the company a few times and a particular CFO might not meet your needs. In the event that you do choose to stick with an individual for a long term, ensure that they are able to commit the time and understand what you will be looking for in their services. That way it will remain mutually beneficial.

It will also be important that any CFO you consider shouldn’t be a part of your company. This individual should be part time at the most and paid through a 1099 form. This allows you to avoid payroll and having to include this individual on your company healthcare. While you are securing the individual that is being recommended, ensure that their standard fees will fit into your budget. Some companies will have an hourly rate for this individual, while others may allot you a maximum of so many hours with the CFO and they receive a flat payment, no matter how many hours are spent with your company.

Above all, the goal is to choose someone who can handle this role and the challenges that come with it. Typically, young adults and those with less than 15 years of experience in an industry don’t tend to be good choices. The reason is that they might not have faced many of the issues you are going through and it will be important that the person you take on is able to deliver fast, effective results. If specific concerns or issues are going to come up, let the Rochester consulting firm that will help you with your CFO outsourcing know in advance. This will reduce the risk of you taking on someone who might not meet your needs and it can help to build a level of mutual trust and understanding about what your needs are, while ensuring that they are being met.