What ObamaCare Means for Your Taxes
President Obama’s Affordable Care Act, which was deemed constitutional Thursday by the Supreme Court, includes some major tax changes that will take effect next year. Here’s a refresher course on how sweeping health-care reform will impact individual taxpayers like you.
Medicare Tax
Right now, the Medicare tax on salary and/or self-employment (SE) income is 2.9%. If you’re an employee, 1.45% is withheld from your paychecks, and the other 1.45% is paid by your employer. If you’re self-employed, you pay the whole 2.9% yourself.
Starting in 2013, an extra 0.9% Medicare tax will be charged on: (1) salary and/or SE income above $200,000 for an unmarried individual, (2) combined salary and/or SE income above $250,000 for a married joint-filing couple, and (3) salary and/or SE income above $125,000 for those who use married filing separate status. For self-employed individuals, the additional 0.9% Medicare tax hit will come in the form of a higher SE bill.