Below are the common health care issues that have hit consumer wallets in 2013 and will also carry over as health care issues well into 2014.
- Individual taxpayers are allowed to deduct medical expenses on their IRS Form 1040 to the extent the costs exceed 10% of their adjusted gross income (up from 7.5% in previous years).
- Flexible Spending Accounts face a new federally imposed $2,500 annual cap effective for 2013.
- Additional Medicare tax for high-income employees began in 2013. The Medicare tax rate will be increased by .9% on an individual earning over $200,000 and $250,000 for married couples filing jointly.
- New Medicare surtax on unearned income also began in 2013. A 3.8% surtax called the Unearned Income Medicare Contribution will be imposed on the net investment income of individuals, estates or trusts. The surtax is on the lesser of net investment income or adjusted gross income of an individual earning over $200,000 and $250,000 for married couples filing jointly.
Net investment income includes interest, dividends, royalties, rents, gross income from a trade or business involving passive activities and net gain from disposition of property (other than held in a trade or business).