Each year since 2010 portions of Obamacare have been implemented. Next year is no exception and starting in January 2013 there are several revenue provisions that will impact many Americans by direct taxes, reduced tax benefits or indirect additional health care expenses.
- Itemized Deductions for Medical Expenses
Increases the threshold for the itemized deduction for unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income; but waives the increase for individuals age 65 and older for tax years 2013 through 2016.
- Flexible Spending Account Limits
Limits contributions to a flexible spending account for medical expenses to $2,500 per year, increased annually by a cost of living adjustment. The 35 million Americans who use a Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2,500 (currently the accounts are unlimited under federal law).
- Increased Tax Rate on Medicare
Increases the Medicare Part A (hospital insurance) tax rate on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases.
- Surtax on Investment Income
Creation of a new, 3.8% surtax on investment income earned in households
making at least $250,000 ($200,000 single). This table below illustrates the new tax rates. These rates will become effective unless adjustments are part of a more comprehensive budget plan.
| Capital Gains | Dividends | Other* |
| 2012 | 15% | 15% | 35% |
| 2013+ (current law) | 23.8% | 43.4% | 43.4% |
While the increased tax rate on Medicare and investment income are geared toward the higher income brackets, the limit on flexible spending accounts and higher threshold for deduction of medical expenses are going to impact many Americans.
