In our last newsletter we covered the new $63 per person fee to offset the cost of including the previously uninsurable under the ACA health care reform act. Today we will address some of the additional taxes that will take effect beginning in the new year.
Starting Jan.1st, a 2.3 percent medical device tax will be imposed on medical devises such as heart pacemakers, blood sugar monitors for diabetics, prosthetic joints and diagnostic scanners. The levy will apply to sales, not profits which will require many companies to limit research and development investment to stay profitable. Over 80% of medical device companies have payrolls of 50 or less and this tax may also force some leading edge developers of medical devices to close their doors.
The threshold for the tax deductibility of medical bills will increase from 7.5 percent of adjusted gross income to 10 percent, making it harder to write off the cost of health care. Pre-tax flexible spending accounts, which 24 million consumers rely on to pay for medical bills and currently have no federally imposed limit, will be capped at $2,500. For families and individuals who have had large medical costs and or use flex accounts, these two provisions mean a greater share income must be devoted to health care.
Additionally, the capital gains tax rate will increase from 15 percent to 20 percent and the dividend rate from 15 percent to 39.6 percent. Subject to changes in the Fiscal Cliff Negotiations, families and small-business owners earning more than $250,000 will pay an additional 0.9 percent Medicare payroll tax.
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