Anybody remember the lyrics to the “Wizard of Oz” song about the Yellow Brick Road? “You’re off to see the Wizard, the Wonderful Wizard of Oz. You’ll find he is a Whiz of a Wiz if ever a Wiz there was. If ever, oh ever, a Wiz there was the Wizard of Oz is one because. Because, because, because, because, because ... because of the wonderful things he does. You’re off to see the wizard, the Wonderful Wizard of Oz.”
Do you get the picture of Dorothy and her companions, arm in arm, skipping down the Yellow Brick Road as they joyfully sing the song?
Switch your image slightly and replace Dorothy with ???, arm in arm with Washington politicians joyfully singing about the “Wizard” (I’ll leave that person’s identity up to your imagination).
It’s finally 2014! The magical date of enactment for Obamacare. We’ve already had some of the taxes that went along with it all the way back to 2010. Believe it or not, there are more taxes from Obamacare that just started in 2013 (you either have already noticed your paycheck had gotten smaller and/or will feel the pain in the next few months as you start filing your tax return) or are now starting in 2014.
1) Increase in Social Security tax withheld on gross wages from 4.2 percent to 6.2 percent
2) Top margin tax rate moved up by 4.6 percent (on taxable income over $450,000 married and $400,000 single filers)
3) Phase out of personal exemptions when adjusted gross income (AGI) goes over $300,000 married and $250,000 single filers
4) Phase down of itemized deductions when AGI goes over $300,000 married and $250,000 single filers
5) Death Tax on estates over $5 million goes up from 35 percent to 40 percent
1) Investment surtax of 3.8 percent on income over $250,000 married and $200,000 single filers
2) Medical device tax of 2.3 percent to be paid directly by the manufacturers and importers. (You do realize that increased “cost” will be passed along to the final user, right?)
3) Reducing the itemized deduction for medical expenses paid out of pocket. (Used to be anything over 7.5 percent of AGI; now it will only be anything over 10 percent of AGI.)
4) Health insurance premium tax directly tacked onto your premium cost of about 2.1 percent
With all these taxes, I do hope you have medical insurance coverage or there will be another tax in 2014 (at least the US Supreme Court says it’s a “tax” while the actual law calls it a “penalty”), and that will be increased in 2015 and beyond if you do not have medical insurance. In other words, if you still can’t afford to purchase medical insurance, the federal government will now “tax” you for not being able to purchase that medical insurance. (You’re off to see the wizard …)
Did you hear what the old farmer says? “When you wallow with pigs, expect to get dirty.”
Kelly Bullis is a certified public accountant in Carson City. Contact him at 775-882-4459, at BullisAndCo.com or on Facebook.