CPA Rockville – Healthcare Reform & Your Taxes

Posted on: March 24th, 2010 by

CPA Rockville - MedicareCPA Rockville – High-income households will be paying more into Medicare as a result of the reform package.  What we do know for certain is that the Medicare payroll tax is going up for individuals making more than $200,000 in wages, and couples making more than $250,000.

Currently, the Medicare payroll tax is 2.9% on all wages, with the worker and his employer splitting the cost (1.45% each).  Under the new law, to begin in 2013, high-income individuals will pay an additional .9% points, making the workers share 2.35%.

In addition to this increase, if the reconciliation bill that passed the House Sunday is approved by the Senate, high-income households would also be subject to a new 3.8% Medicare tax on investment income starting in 2013.  This includes capital gains, dividends, interest, annuities, royalties, and rents.  Any investment income that had previously been characterized as “tax exempt”, however, would not be subject to the new tax.

Not all investment income may be taxable due to how the proposal is structured though.  Seeking advice from your financial adviser in Rockville, MD or certified public accountant (CPA) may help to prepare you for these upcoming changes.



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