As congress tries to figure out if they are going to repeal and replace, tweek, twist, or run away from Obamacare we are left to contemplate an unknown future. Obamacare is integrally tied into the internal revenue code.  Any changes to healthcare law will surely impact the taxes we pay. This month lets make it short and simple and just outline the many way the Affordable Care Act effected the tax code.  If nothing else this might help clarify the changes possible if congress has the courage to enact a wholesale repeal of the law.  But if not you can be sure that there will be movement of some kind with these tax provisions.
  1. Mandates: insurance mandates impose penalties on individuals who fail to maintain health insurance as well as on companies that fail to offer insurance to their employees
  2. Tax credit: the premium tax credit helps people buy insurance whose income falls between 100% and 400% of the federal poverty line.
  3. Net investment income tax: the net investment income tax is 3.8% of net investment income for married couples with adjusted gross income over $250,000.
  4. Additional medicare tax: the additional medicare tax is a 0.9% additional tax on earned income over $250,000 for married couples.
  5. Small business health insurance credit: the small business health insurance credit provides a limited credit for small businesses that provide health insurance to their employees.
  6. FSA cap: the flexible spending account cap limits FSA contributions to $2,500.
  7. Reduced medical expense deduction: medical expenses are now less deductible because the threshold for deducting them was raised from 7.5% of AGI to 10% of AGI.
Along with these tax provisions there are some other minor taxes that came in with the affordable care act. All together it was a significant tax increase and shift.  The repeal and replacement of the ACA is sure to be impactful as well.
Ben Smith, MTAX, CPA

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