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2013: Obamacare “High Medical Bills Tax” to hit 10 Million Middle Class Families
The average family subject to this new tax makes just over $53,000 and will face an income tax increase of between $200 – $400 per year.
Background: Americans have long been allowed to deduct out of pocket medical expenses as an itemized deduction on their taxes. They cannot have already benefited from other tax provisions for health care like tax-free employer-provided care or tax-free accounts like flexible spending accounts (FSAs) or health savings accounts (HSAs). A full list of qualified expenses can be found in IRS Publication 502.
After totaling all unreimbursed, out-of-pocket medical expenses, the taxpayer must then subtract from this figure an amount equal to 7.5 percent of the taxpayer’s adjusted gross income (AGI). This subtraction amount is known commonly as a “haircut.”
According to the IRS, 10 million families took advantage of this tax deduction in 2009, the latest year of available data. They deducted $80 billion in medical expenses after applying the “haircut.” The Office of Management and Budget reports that this tax deduction saves these taxpayers upwards of $10 billion annually.
Obamacare’s tax hike: The Obamacare law made one change to this tax provision: it raised the “haircut” from 7.5 percent of AGI to 10 percent of AGI. Since virtually all taxpayers claiming this income tax deduction make less than $200,000 per year, the income tax hike falls almost exclusively on the middle class:
-Virtually every family taking this deduction made less than $200,000 in 2009. Over 90 percent earned less than $100,000.
-The average taxpayer claiming this deduction earns just over $53,000 annually.
I Luv Bacon
January 5th, 2013
Yup.I’m getting clipped an extra $45 a week, if I’m lucky enough to b working.
Are the welfare queens getting sqeezed as well?
Baby daddies, charge your o-phone- booty calls are coming in 3, 2,….
eternal cracker p
January 5th, 2013
All you right wing extremists that can’t do math and blame all the liberals. 7.5 percent or 10 percent is the same effective number when the base is FREE. 7.5 x 0 = 0 and 10 x 0 = 0.
You ain’t gotta be worrying about gas, mortgage, or health.
HooHooNayNay
January 5th, 2013
Huh. 80% of the patients at my old hospital walked in and out with utterly no intention of acknowledging their hospital bill anyway.
2013: Obamacare “High Medical Bills Tax” to hit … – I Own The WorldReduce Your Medical Debt | Reduce Your Medical Debt
January 6th, 2013
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