Affordable Care Act: Individual Tax Implications

There are some changes needed to be aware of in 2013 that took effect because of the Affordable Care Act signed into law March 23, 2010. Some of the most significant changes for individuals are: 

• Impose a 3.8% tax on unearned income for higher-income taxpayers ($200,000 for individual taxpayers and $250,000 for married couples filing jointly).
• Increase the Medicare Part A tax rate on wages by .9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly.
• Increase the threshold for the itemized deductions for unreimbursed medical expenses from 7.5% of AGI to 10% of AGI for regular tax purposes.

*All of the above changes took effect January 1, 2013