[Ed. note: No free lunch]
As reported Sunday by the Review-Journal’s Jennifer Robison, there are a slew of new taxes to help pay for the boondoggle that is the Affordable Care Act, and the Internal Revenue Service will be reaching deep into wallets to collect that money starting next year. Those with high incomes face the biggest increases, but people at all income levels ultimately will feel the costs of the health care law — beyond higher deductibles and out-of-pocket expenses.
Single filers earning more than $200,000 and joint filers who earn more than $250,000 will see a 0.9 percent Medicare surtax on top of the existing 1.45 percent Medicare payroll tax, as well as a 3.8 percent Medicare tax on unearned income (investment dividends, rental income, interest and capital gains on property). And as Ms. Robison reported, that’s on top of the 2013 increases in the capital gains tax and the highest income tax bracket, meaning high earners are seeing a substantial tax jump in just two years’ time.
For the majority of taxpayers, whose income doesn’t meet that $200,000/$250,000 threshold, there are new limits on medical expense deductions and on flexiblespending accounts that are used to pay for everything from prescriptions to braces or even tuition for special-needs children.