Tax Time - Obamacare Makes It More Complicated - KMPH FOX 26 | Central San Joaquin Valley News Source

Tax Time - Obamacare Makes It More Complicated


With less than a month until the tax deadline, some filers are finding the Affordable Care Act is making it more complicated than ever.

Deducting medical and dental bills is harder this year. In the past, filers have been able to take the deduction if it totals 7.5% their income. But now those bills have to total 10% for Americans younger than 65.

It's an additional way to pay for the Affordable Care Act, and it's a way for people to take fewer deductions and so a few more taxes going to the government.

Americans who make more than $200,000 a year, or a married couple making $250,000 also have to pay a new 3.8% unearned income tax. It's not the money we earn by working. It's through interest, dividends, capital gains, rents, things like that.

There's also a new Medicare Payroll Tax - also for those income levels. If you only hit the total as a married couple filing jointly, make sure you're setting aside the extra .9%.

The government also placed new limits on flexible spending accounts last year - to push Health Spending Accounts for high deductible medical plans. Americans who choose an HSA never have to pay taxes on the money, and unlike a Flex plan, it rolls over from year to year.

Tax experts say if you got one of these surprises, it's not too late to plan for next year. You can start saving for your 2014 tax return or reduce your taxable income with an HSA or with your 401K at work.

And more changes are on the way this year with new information on your W–2. Penalties begin for people without medical coverage, but low income filers who can not afford the fine may be eligible for tax credits.

Sheila Gray reporting.

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