Additional Medicare (Hospital Insurance) Tax - High-Income Taxpayers

The Medicare (aka Hospital Insurance (HI)), tax rate (currently at 1.45%) would be increased by 0.9 percentage points on individual taxpayer earnings (wage withholding and SE tax) in excess of compensation thresholds for the taxpayer’s filing status; see table below. These amounts are not adjusted for inflation, so will remain as shown until changed by
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How Does the Affordable Care Act Affect You and Your Taxes?

The health care legislation, the Affordable Care Act (aka Obamacare), signed into law in 2010 affects virtually every individual in one way or another and  significantly impacts the preparation of tax returns. The provisions take effect over a period of years and are categorized in this article by the year they became or will become
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Shared Responsibility Payment – Penalty for Being Uninsured

Penalty Calculation - Beginning in 2014, there is a penalty for not having health insurance unless one of several exemptions is met. The penalty is being phased in over three years. The monthly penalty for 2014 is the greater of $7.92 per uninsured adult plus $3.96 for each uninsured child (under age 18), but not
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Shared Responsibility Payment - Penalty for Being Uninsured

Penalty Calculation - There is a penalty for not having health insurance unless one of several exemptions is met. The penalty is being phased in over three years. The monthly penalty for 2016, the final phase-in year, is the greater of $57.92 per uninsured adult plus $28.96 for each uninsured child (under age 18), but not
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Tax Credits for Small Employers Offering Health Coverage

The Patient Protection and Affordable Care Act provides a tax credit for an eligible small employer (ESE) for nonelective contributions to purchase health insurance for its employees. The term "nonelective contribution" means an employer contribution other than an employer contribution pursuant to a salary reduction arrangement. o 2010 through 2013 – For tax years 2010
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Employee Notices

Beginning January 1, 2014 (October 1, 2013 for existing employees), certain employers must provide written notice to employees about health insurance coverage options available through the Marketplace (insurance exchanges). Notices must be provided by employers to whom the Fair Labor Standards Act applies. Generally, means an employer that employs one or more employees who are
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Penalty for Not Being Insured

Non-exempt U.S. citizens and legal resident taxpayers will be penalized for failing to maintain at the least the minimum essential health coverage, which includes: Government-sponsored programs (e.g., Medicare, Medicaid, Children's Health Insurance Program), Eligible employer-sponsored plans, Plans in the individual market, and Certain grandfathered group health plans and other coverage as recognized by Health and
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Fee on self-insured health plans -Patient-centered Outcomes Research Fee

Section 4376 imposes a fee equal to $2 ($1 for plan years ending during physical year 2013) multiplied by the average number of lives covered under the plan. The plan sponsor is liable for the fee. The fees qre required to be reported annually on the 2nd quarter. Use Form 720 (IRS #133) and pay
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Medical Itemized Deductions Limited

The itemized deduction for medical expenses will be limited in the following manner: AGI Threshold - The AGI threshold percentage for claiming medical expenses on a taxpayer's Schedule A is increased from 7.5% to 10%, which is the same as the current threshold percentage for alternative minimum tax (AMT) purposes. Delayed Implementation for Seniors -
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Premium Assistance Credit

Tax credits will be available for low-income individuals who obtain health insurance coverage with a qualified health plan (QHP) through an Exchange "Exchange" The Health Care Act requires each state to establish an American Health Benefit Exchange” (Exchange) by Jan. 1, 2014, and requires insurers to provide QHPs to be sold on these Exchanges. The
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