(NAPSI)The health of your wealth may depend on how well you understand the Affordable Care Act and the changes it creates for federal taxes. <\/p>\n
New Rules <\/p>\n
Whether these changes affect you is largely a matter of your households gross income minus certain deductionsyour adjusted gross income (AGI)and whether you have health insurance. <\/p>\n
While most Americans will see little to no change when filing taxes due April 15, 2014, the experts at TaxACT point out that higher income taxpayers are more likely to be affected, particularly those with investment income. <\/p>\n
Anyone whose modified AGI is $200,000 or more ($250,000 if filing jointly or $125,000 if married filing separately) will pay an additional 3.8 percent tax on 2013 investment income, including interest, dividends, capital gains, and rental and royalty income. Itll be added to tax already paid on investment income. For example, if you pay 20 percent tax on a long-term capital gain, your total tax on the gain will be 23.8 percent. <\/p>\n
Fortunately, you can reduce your investment income by expenses that can be allocated to it, such as investment interest expense, advisory and brokerage fees, and rental and royalty expenses. You can also reduce it by state and local income taxes that can be allocated to investment income items. <\/p>\n
If you pay the additional net investment income tax, you may also pay an additional 0.9 percent Medicare tax on wages and compensation in excess of $200,000. Since the tax is automatically withheld from employee wages, you simply report the amount in Boxes 5 and 6 of your Form W-2 on your tax return. The tax is calculated using figures on Schedule SE for business owners and the self-employed. <\/p>\n
If you deduct unreimbursed medical expenses, the threshold has increased to 10 percent of your AGI. For example, if your 2013 adjusted gross income is $50,000, you can deduct only unreimbursed medical expenses that exceed $5,000. The threshold remains at 7.5 percent for taxpayers age 65 or older. <\/p>\n
Let affordable, do-it-yourself tax software navigate these tax law changes for you, suggests TaxACTs Jessi Dolmage. <\/p>\n
The programs ask easy questions to help minimize your tax liability and maximize your deductions and credits. <\/p>\n
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Health Care Reform And Your Taxes<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" (NAPSI)The health of your wealth may depend on how well you understand the Affordable Care Act and the changes it creates for federal taxes. New Rules Whether these changes affect you is largely a matter of your households gross income minus certain deductionsyour adjusted gross income (AGI)and whether you have health insurance. While most Americans will see little to no change when filing taxes due April 15, 2014, the experts at TaxACT point out that higher income taxpayers are more likely to be affected, particularly those with investment income Continue reading