AAII Journal > May 2010
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Health Care Reform's Tax Implications

by Mitchell Freedman

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The recently passed health care reform bill levies new taxes that are intended to help offset the cost of expanded access to care.

Taxpayers who have significant unearned income and those who have significant income from various sources can very well be looking at—aside from income tax changes—an additional 4.7% of tax. That’s a hefty bite.

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Mitchell Freedman , CPA/PFS, AIF, is the founder and president of Mitchell Freedman Accountancy Corporation, specializing in business management and financial counseling for performing and creative artists and individuals with complex and unique financial needs. He is also the founder and president of MFAC Financial Advisors, Inc., a registered investment advisory firm.
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The most significant impacts I have seen at this point are for married couples whose modified adjusted gross income MAGI exceeds $250,000 and individuals whose incomes exceed $200,000. Taxpayers above these thresholds will pay a higher tax on dividends and interest and other types of income that are not wage income. The capital gains tax will be higher as well. As a result, I think this will impact individuals who have significant portfolios.

Before providing detail on the new taxes, I want to state that there still remains a high amount of uncertainty about how the law is going to impact final tax regulations. Even though the bill was debated for a long time, it was rushed through. As a result, the government is going to revisit a number of issues related to the legislation, and it is difficult to predict what kinds of changes are going to be incorporated into the tax regulations.

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→ Mitchell Freedman , CPA/PFS, AIF, is the founder and president of Mitchell Freedman Accountancy Corporation, specializing in business management and financial counseling for performing and creative artists and individuals with complex and unique financial needs. He is also the founder and president of MFAC Financial Advisors, Inc., a registered investment advisory firm.

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