Investors have many questions about health-care reform and taxes top the list.

Chris Hennessey explains the new taxes and fees created by the Affordable Care Act (ACA) that will generate more revenue for the federal government. Here are some highlights.

1. Medicare surtax on investment income.
A 3.8% surtax on investment income became effective this year as a result of the ACA.

2. “Cadillac” plan tax. In 2018, a new tax will be imposed on expensive health-care plans that offer more benefits.

3. Excise tax on medical devices. Manufacturers in the medical device industry are being assessed a 2.3% excise tax on their products.

4. Limit tax deduction for medical expenses.
Prior to the ACA, taxpayers were able to deduct medical expenses once the total exceeded 7.5% of income. That limit was raised to 10%. As a result, taxpayers will be able to deduct less for medical expenses.

5. Flexible spending account limits have been reduced.
The limit was reduced to $2,500 from $6,000.

There also are additional industry taxes that could ultimately be passed on to consumers.


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