Friday, November 14, 2014

7 Steps to Understanding the Affordable Care Act This Tax Season

The Affordable Care Act has brought monumental change to the U.S. healthcare system, and its impact on taxpayers and accountants continues to be no small matter either. Daniel G. Mazzola, CPA, an investment advisory representative with American Portfolio Advisors, specializes in ACA issues. He offers the following tips and advice about the law and its requirements, as we head into tax season.
  1. The medical expense deduction threshold rose from 7.5 percent of adjusted gross income (AGI) to 10 percent. That's not applicable if the taxpayer or spouse is 65. The age-based waiver expires in 2016. What that has meant for your clients with AGIs of $100,000 and $10,500 in medical expenses is that they could have claimed a $3,000 deduction in 2012, but only $500 last year. The increased threshold doesn't apply if either the taxpayer or spouse turns 65 before the end of years 2013 to 2016. The exemption is rescinded in 2017. For purposes of the Alternative Minimum Tax, medical expenses are deductible only if costs exceed 10 percent of AGI. The healthcare act doesn't change treatment of the alternative minimum tax (AMT).....

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