How Health Care Reform Could Affect Your Family Taxes this Year

Time to pay your taxes? Have you wondered how the health care reforms can have an effect on your taxes in this year? Whether you are in the low or the high income group, everyone will be some way or the other affected by taxes. The advent of the Affordable Care Act means that your taxes will be a little different this year. Whether this will be for the good or bad remains to be seen, but the major apparent changes that are going to take place are the following:

Misuse of HSA: Penalized

Under the new law that governs medical facilities the misuse of Health spending accounts to pay for the treatment of people who are not qualified for it will attract stiff penalties. The provision was effected from the year 2011.

FSA Contributions

Flexible Spending Accounts will be limited by their pre tax contributions to 2,500, for a single employee. The measures taken by the government are expected to amass more than $40 billion in taxes over a decade.

Medicare Tax

The new tax will increase the burden of taxation on the high income households by 0.9% for people who earn more than $200,000 individually or jointly. The employees will be held responsible for the payment of this tax so it may safely assumed that this will be a tax deducted at the source. Affluent people will pay for the benefit of medical care to their less fortunate brethren to the average range of an additional $6,000 every year, adjusted for inflation. 

New Form W-2

From 2014 a new designation numeral will be assigned to you, through which your employers will submit their accounts to the IRS along with your Medicare plan. This will make the distinction between your status as a beneficiary or a defaulter.

Medicare Expense

The cost of medical aid will be reduced by increasing the deductions at site of treatment by 2.5% and more for people of 65 years and above of age. People with modest incomes will benefit most from these measures as health care and medical facilities will be made available to them at lower rates than was previously available.

Tax Credits

If you are unable to purchase health insurance due to poverty you may qualify for tax credits that will help you get proper medical attention, with ranges of assistance varying from annual incomes of $30,000 to $88,000.

Individual Penalty

All Americans are obligated to retain and understand the real importance of health insurance by the year 2014, or face strict penalties in the fiscal year 2015. The punitive costs will start at $95 for each member of the family or 1% of the net income, whichever higher. The amount that you are penalized for increase yearly, adjusted to inflation for non-conformation with the law.

Income tax

Expenses on health will be tax free so it will no longer be need to be reported as part of your income.

Whatever the changes may be, remember to pay your taxes after checking the internet in time and relax!