In March, 2010 Congress passed two new laws which will have an immediate effect on business and individual taxpayers in America,
Fives Things to Know Now About the Health Care Bill of 2010
Effective for tax year 2010:
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1. Young adults will be able to stay on their parents’ insurance until their 26th birthday.
2. Seniors will get a $250 rebate to help fill the doughnut hole in Medicare prescription drug coverage which falls between the $2700 initial limit and when catastrophic coverage kicks in at $6,154
3. The adoption tax credit and assistance exclusion will increase by $1000 4. A 10% tax will be imposed on amounts paid for indoor tanning services on or after July 1.
5. Businesses with less than 50 employees will get tax credits covering up to 35% of their health care premiums – increases to 50% by 2014
Five Ways the Health Care Bill of 2010 will Change in the Next 3 Years
1. Companies will be required to include the value of employer provided health coverage as an information disclosure on the W2.
2. HAS and flex plan withdrawals may no longer be used for over the counter drugs unless prescribed by a physician. See our follow-up news letter on HSA’s and HRA’s
3. The Medicare payroll tax will increase from 1.45% to 2.35% for individuals earning more than $200,000 and married filing jointly above $250,000. These will be paid only by the employee and not matched by the employer.
4. There will be an increase to the income threshold from 7.5% to 10% of adjusted gross income for medical expense deductions. Those older than 65 can still claim the 7.5% through 2016
5. Unearned income will be subject to a 3.8% surcharge tax for single with adjusted gross income of $200000 and married filing jointly over $250,000. Unearned income includes interest, dividends, capital gains, annuities, royalties and passive rental income, but not tax-exempt interest or qualified retirement plan withdrawals.
This list is not meant to be all inclusive. Many other changes were included as a part of this massive piece of legislation.
Sincerely yours,
Donya Oneto, CPA_
