Tax Hikes, Increased Costs And Tax Breaks We’ll See Due To Health Care Reform

If you care about tax hikes increased costs, this guide gets straight to the point. We break down what actually matters, skip the fluff, and show you how to put it to work today.

Key Takeaways

• SharePinTweetShare11 SharesIn March of 2010 President Obama signed H.R.3590 “Patient Protection and Affordable Care Act” into law after it passed both houses of Congress.
• It was hailed by his administration as being a breakthrough piece of legislation that would provide health care coverage to all Americans.
• Employer deduction for providing Medicare Part D prescription drug coverage for retirees removed: Will take effect in 2013.
• This has already resulted in numerous companies considering dropping coverage for retirees as it would be significantly cheaper for them.

Common Mistakes to Avoid

While more people will be covered by the law, it does come with it’s costs - with the biggest one being an increased tax bill for numerous people. A new 40% excise tax, beginning in 2018, on high-cost health plans: So called “Cadillac Health Care Plans” will see a new 40% excise tax on portions that exceeds $10,200 for individuals and $27,500 for families.     This will affect gold-plated plans offered by some employers, and some individual plans.

Worth noting: the floor for itemized deductions for medical expenses will rise to 10% from 7.5%:   The change will happen beginning in 2013.  Taxpayers age 65 and over will be xempt from the change through 2016. More people would be moved to the government roles.

Is Tax Hikes Increased Costs Worth It?

More importantly, if you like to go tanning, there will be a new 10% excise tax on indoor tanning services: I don’t care much about this, I don’t tan - but they’ll get more money wherever they can - they gotta fund it somehow! Tax Breaks For Individuals And Small Business In addition to the increased taxes, reduced deductions and fees, there will be some tax incentives for small businesses and individuals.

There will be a refundable tax credit for some reduce income individuals: Once the individual insurance mandate takes effect in 2014, people with a household income of between 100% and 400% of the federal poverty level (Near $11,000 to $44,000 for singles and $22,000 to $88,000 for families.) will get a health insurance premium tax credit.  The credit will vary depending upon income. Some small businesses will be given incentives to assist provide insurance coverage:  Small employers with 10 or less workers and average annual wages of less than $25,000 can receive a credit of up to 35% of their health premium costs each year through 2013.

Where the Real Savings Hide

Remember that the credit is phased out for firms larger than that and disappears completely if a company has more than 25 employees or average annual wages of $50,000 or more. So there you have it.  Those are a few of the tax impacts that you will see as a result of the new health care law.

What do you think of the health care initiative?  Are you willing to pay more for your coverage so that others can be insured?  Will you be paying more due to any of the provisions mentioned here?  Tell us your thoughts in the comments. Health Insurance Premium Tax Credits: Getting Assist Paying For Health CareWith health insurance premium costs set to go up, don't forget to make apply of tax credits if you are eligible.

Frequently Asked Questions

How can I save money on tax hikes increased costs?

Compare prices across a few retailers, look for active coupon codes, and time bigger buys around sales events. A new 40% excise tax, beginning in 2018, on high-cost health plans: So called “Cadillac Health Care Plans” will see a new 40% excise tax on portions that exceeds $10,200 for individuals and $27,500 for families.     This....

Is it worth shopping around for tax hikes increased costs?

Usually yes. Worth noting: the floor for itemized deductions for medical expenses will rise to 10% from 7.5%:   The change will happen beginning in 2013.  Taxpayers age 65 and over will be xempt from the change through 2016.

Smart Ways to Save More on Tax Hikes Increased Costs

• Compare the final price including shipping, not just the headline number.
• Check for student, military, or first order offers you may qualify for.
• Time non urgent purchases around major sale events for the deepest cuts.
• Leave items in your cart for a day; some stores send a follow up discount.
• Pair cashback with a coupon so you save twice on the same order.

Final Thoughts

Before you check out, line up tax hikes increased costs against current promotions and any codes you can stack. Small habits like these add up to real savings over a year.

Originally published at biblemoneymatters.com.