I was reading an article on the timeline for Heath Care Reform changes and I was struck by how a few of the new changes are just down right odd.
• Take the 10% tax on amounts paid for indoor tanning services. Usually products have a sales tax but in this case tanning services provided after July 1, 2010 will be taxed. What is the thought behind singly out tanning services?
• I like the one allowing me to carry health insurance on my 27 year old child. A few more years to him through college is always helpful!
• I do not like that the itemized deduction for unreimbursed medical expenses is increased from 7.5% of adjusted gross income to 10% starting in 2013. There is an exception to this increase for those over age 65 until 2017. If we are going to penalize taxpayers & business for not carrying insurance why are we going to decrease this tax benefit?
• This one should be fun to track. Starting in 2013 for high income earners (married couples earning more than $250,000) the hospital insurance portion of FICA will go up from 1.45% to 1.54% a .09% increase. It is imposed on the combined earnings and is only on the amount over the $250,000. My question is how will the people doing payroll of husband know that the combined wages of husband and wife have now exceeded $250,000 and an additional .09% needs to be taxed?
• Starting in 2011 amounts paid for over the counter medications can no longer be reimbursed from HSAs, MSAs, or health FSAs. When I had a flexible spending account I always counted on this reimbursement when it got to the end of the year and I needed to zero out my flex account, I would add up all my little receipts for Tylenol, Advil, & cough syrup and ask for a reimbursement. After this year it is gone.
• The tax on distributions from an HSA account not used for medical expenses will be 20% instead of 10% starting in 2011.
Like I said some of these new tax changes are down right odd, but I guess they make for job security or is it senility?