Piper Tax & Accounting, LLC
1975 S. Pere Marquette Hwy. Ludington, MI 49431
Affordable Care Act Provisions
Health Care

News & Events

 Effective Provisions
  Start of 2013


- Threshold for deducting medical expense increases from 7.5% to 10% of AGI.
- Annual cielings on deductible payins to health savings accounts reach maximums of $6,450 for account owners with family medical coverage and $3,250 for single coverage. HSA owners born before 1959 can put in $1,000 more.
- Limitations on out-of-pocket expenses such as deductibles and copayments increase to $12,500 for those with family coverage and $6,250 for single. Minimum policy deductibles increase to $2,500 for families and $1,250 for individuals.
- (MI) Michigan Tax Rate changes from 4.35% to 4.25%.
- 3.8% Medicare surtax on investment income to filers single or H.O.H. who have modified AGIs over $200,000. $250,000 for married couples. Tax free interest still holds, along with payouts from retirement plans.
- Estate & Gift tax exemption increases to $5,250,000. New tax rate of 40%, with the annual gift tax exclusion being $14,000 per donee.
- Standard deductions are now $12,200 for Married couples with additional $1,200 for each 65 or older. Single claims $6,100, or $7,600 if at least 65. H.O.H. gets $8,950 plus $1,500 more once they reach age 65. Blind receive $1,200 more, $1,500 if unmarried and not surviving spouse.
- Personal exemptions increase to $3,900 for filers and their dependents, but is phased out for high-incomers. It is cut by 2% for each $2,500 of AGI over the same thresholds for the itemized deduction phaseout.
- AMT exemptions jump to $80,800 for couples and $51,900 for both singles and heads of household.
- The Social Security wage base rises to $113,700. Benefits rise by 1.7%.
- The basic Medicare Part B premium increases to $104.90 per month. Upper-income seniors ($170,000 for couples / $85,000 for single) will see much higher surcharges.
- Maximum 401(K) contribution will be $17,500. Age 50 and over may contribute as much as $23,000. SIMPLEs will rise to $12,000 with an additional $2,500 for people 50 or older.
- Payin limits for IRAs and Roth IRAs will jump to $5,500 with anyone 50 or older having the option of contributing an extra $1,000.
- Standard mileage allowance for business driving is 56.5 cents per mile as travel for medical purposes and job-related moves increases to 24 cents per mile.
- Marriage penalty relief for income taxed in the 10% & 15% rate brackets is now permanent.
- Individuals whose total taxable income dose not exceed the top limit of the 15% income tax bracket, the income tax rate for long-term capital gains is 0%.
- The American opportunity credit has been extended for 5 years & can be used for 4 years of post-secondary education.
- Student loan interest deduction is now permanent.
- Taxpayers of age 70 1/2 may have individual retirement arrangement distributions made directly to eligible charities during 2013 without inclusion in gross income. (A $100,000 limit Annually)
Effective Provisions
Start of 2014

- U.S. citizens & legal residents must maintain minimum essential health coverage. (Affordable Care Act).
- Individuals who don't have health insurance through an employer plan may be eligible for a refundable tax credit to help pay premiums for insurance purchased on a state exchange if income does not exceed 400% of the federal poverty level.

Affordable Heath Care Act

* Open enrollment government programs will begin October 1, 2013.

* Starting in 2014 small businesses will start the program SHOP (Small Business Health Options Program). Under this program
you choose the level of coverage you’ll offer, and define how much you’ll contribute towards your employees’ coverage. You will also have access to a small business healthcare tax credit. This tax credit covers as much as 50% of the employer contribution toward premium costs for eligible employers who have low- to moderate-wage workers.

*
This Act fills in current gaps in coverage for the poorest Americans by creating a minimum Medicaid income eligibility level across the country.

* Beginning in 2014 coverage for the newly eligible adults will be fully funded by the federal government for three years.  It will phase down to 90% by 2020.

* People newly eligible for Medicaid will receive a benchmark benefit or benchmark­ equivalent package that includes the minimum essential benefits provided in the Affordable Insurance Exchanges.

* This system enables individuals and families to apply for coverage using a single application and have their eligibility determined for all insurance affordability programs through one simple process.

* Extends funding for the Children's Health Insurance Program (CHIP) through FY 2015 and continues the authority for the program through 2019.

* A new office will be created within the Centers for Medicare & Medicaid Services to coordinate care for individuals who are eligible for both Medicaid and Medicare ("dual eligibles" or Medicare-Medicaid enrollees).
 
In Business Since 1960