Saturday, October 4, 2014

Taxes in Obamacare that Impact My Family

I know I've gone over this before, but felt like repeating it. 

Obamacare also hurts families directly by decreasing the amount of medical expenses people can deduct from their taxes. The president and his cohorts promised no new taxes or burdens on the middle class, right!?

They lied. The #ACA increased the deduction limit from 7.5% of your AGI to 10% of your AGI. Meaning, the first 10% of your AGI in accrued medical expenses CANNOT be deducted. This is another tax increase on our family. 

For example, prior to the law being passed, someone earning $100,000 (AGI) a year couldn't deduct the first $7,500 in medical expenses. Now, that same person cannot deduct the first $10,000 in medical expenses. 

Consider yourself lucky if you don't have enough yearly medical expenses to itemize medical on your taxes. This might not be a tax you notice- but I assure you, families like mine notice.

Obamacare decreased FSA and HSA limits. Since my family has used an FSA for well over a decade, I'll discuss that. Prior to the law passing, we were allowed to put $5,000 into a FSA account BEFORE taxes. Managed by a company, these funds could only be used to pay for eligible, tax-deductible medical expenses. We estimate that the tax savings allowed us to pay hundreds of dollars in medical expenses. Obamacare dropped the FSA limit to $2,500, which is another tax increase on our family. 

If you don't have a chronic illness or chronically ill loved ones, this tax increase may not affect your family directly. This is why I repeatedly state that Obamacare is a tax on the sick. 

The medical device tax- I look around my house and see hundreds of items now subject to the medical device tax. Medication pumps, infusion supplies and catheters to name a few. Any item we receive from a home health company is now taxed. We deal with 3 such companies. This tax increases the cost of these items and the increased cost is passed onto insurance companies, which, in turn, is then passed on to us via increased premiums, deductibles, out of pocket maxes, and co-pays. 

There are other taxes included in the law- the tanning salon tax, etc, but I will stick with the ones I know have directly impacted my family. 


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