Fall 2010 issue of Horizons

• Imposition of Medicare tax on unearned income at 3.8 percent of investment income (e.g., interest, dividends, rents, etc.) for adjusted gross income in excess of $200,000 for individuals and $250,000 for joint filers beginning in 2013. Tax On High-Cost Insurance • 40 percent surtax on high-cost health insurance beginning in 2018, to the extent the annual premium exceeds $10,200 for single coverage, $27,500 for family coverage. Dependent Coverage • Children are permitted to stay on their parents’ insurance policies until they are 27 years of age. FSAs & HSAs • Flexible Spending Accounts and Health Savings Accounts must use the definition of “medical expense” for itemized deduction purposes – over-the-counter medicines will no longer be available for reimbursement beginning in 2011.

• Health Flexible Spending Accounts are capped at $2,500 per year after 2013 (to be indexed annually for inflation after 2013). • Nonqualified distributions from Health Savings Accounts increased from 10 percent to 15 percent effective for distributions after 2010. • Nonqualified distributions from Archer Medical Savings Accounts increased from 15 percent to 20 percent effective for distributions after 2010. Medical Expense Deduction • Threshold for itemized medical expenses increased from 7.5 percent of adjusted gross income to 10 percent effective for years beginning after December 31, 2012, except the effective date for individuals age 65+ and their spouses will be years beginning after December 31, 2016.

Please contact us if you have questions or concerns regarding how healthcare reform may affect your business.

RubinBrown’s Tax Consulting Services Group

Jim Massaro, CPA Partner

Steve Brown, CPA Partner-In-Charge Tax Consulting Services Group steve.brown@rubinbrown.com 314.290.3326

Tax Consulting Services Group jim.massaro@rubinbrown.com 303.698.1883

Mary Ramm, CPA Partner

Ken Rubin, CPA Partner-In-Charge

Tax Consulting Services Group mary.ramm@rubinbrown.com 913.491.4406

Professional Services Group ken.rubin@rubinbrown.com 314.290.3417

www.rubinbrown.com

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