Many of the provisions of the Affordable Care Act (ACA), also known as ObamaCare, are in effect.
My business owner clients are struggling to understand how the ACA will change health insurance obligations to their employees. Individual clients are sorting out whether to buy new health coverage from the federal government or a state exchange—or whether to keep their existing health insurance.
Taxes and the ACA have come together in a number of ways. First, high income taxpayers have been hit with an extra .9 percent Social Security tax obligation on their earned income. Second, certain business owners who fail to provide health insurance to employees by the deadline will have to pay a special tax penalty. Likewise, individuals who fail to buy personal health coverage may have to pay their own penalty taxes.
One of the biggest tax changes designed to help pay for the cost of the ACA was the new 3.8 percent Medicare surtax on high income earners. Combined with the other federal tax changes that affect high income taxpayers, the Medicare surtax can increase the total tax liability for my most successful clients. To continue reading click here.