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New Taxes Coming in 2014

no new taxesThe debate over the so-called 2013 fiscal cliff diverted attention away from new taxes set to take effect a year from now as 2014 dawns, mostly a result of the health care reform legislation..  It’s my hope that as the time for these taxes to kick in draws near, people will rise up in protest to delay or overturn many of these taxes.

A Tax on Medical Devices

One tax that has people “up in arms” is the coming tax on medical devices.  That affects companies that make different kinds of medical equipment.

This imposes a new tax of 2.3 percent of the profit from gross sales.  Critics say the $29 billion that’s expected to reap over the coming decade will reduce funding for research and development.  There’s also the question of how that will impact jobs.

At present, the medical device industry has some 400,000 employees in about 12,000 factories.  The question has been raised as to whether these companies might relocate in other parts of the world to avoid paying taxes.

A Tax on Investment Income for Those Making $200,000+ a Year

If you make at least $200,000 a year individually, or you file jointly as making at least $250,000, you’ll see a 3.8-percent tax on investment income.  That will include profits derived from selling a house.

Higher Medicare Taxes for Those in High Income Brackets

The same people who will see higher taxes on investment earnings will likewise see a 3.8 percent increase on the Medicare payroll tax.  And, this will coincide with the threshold for claiming tax deductions for itemized medical expenses rising from 7.5 percent to 10 percent.

Medical flexible spending account annual contributions will also be limited to a maximum of $2,500 in 2014.

Higher Taxes Will Impact a Range of Industries

Lots of industries will be affected, ranging from tanning salons to medical device manufacturers.  All of the new taxes together are expected to be worth about $1 trillion.

Fred Adams

Fred Adams is a passionate advocate for everyone he comes in contact with as well as a freelance music journalist.As a V.P. for Medigap Advisors, he uses his 25 years of insurance experience to help people make the most of Medicare.

 

 
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  • Genice

    Thank You for this great information. I have suggested to everyone that keep checking the MediGap Blog for current up to date status.

  • Ryan

    There is also the Health Insurance Tax placed on fully insured plans (not supplemental plans). The tax is 8 billion in 2014 * 2015 and then jumps to 14 billion in 2016. This tax is towards insurance companies but they will just pass it down to the consumer. The Wall Street Journal predicted a 30% rate increase for most companies.