Expanded Medicare taxes and other changes make planning critical

1. Health care actTAX OVERVIEW – INDIVIDUALS Expanded Medicare taxes and other changes make planning critical Presented by: <<Company Name>> [Insert your logo here]

2. The agenda • The health care act’s tax impact on individuals • Medicare tax increase on earned income • Withholding issues • Minimizing the additional tax • New Medicare tax on investment income • Income subject to the NIIT • Income exclusions • Minimizing NIIT • Other changes: • Increased threshold for medical expense deduction • New FSA limit • Individual mandate [Insert your logo here]

3. MEDICARE TAX – EARNED INCOME Additional Medicare tax now applies to higher-income earners

4. Medicare tax increases • FICA wages are subject to 2.9% Medicare tax • 1.45% paid by employer • 1.45% withheld from employee wages • Self-employed pay both portions, but they can deduct employer portion for income tax purposes • Starting in 2013, taxpayers with earned income over $200,000 per year must pay additional 0.9% Medicare tax on excess earnings • $250,000 for joint filers • $125,000 for married filing separately [Insert your logo here]

5. Withholding issues • 0.9% Medicare tax doesn’t include acorrespondingemployer portion • Employers must withhold additional tax • Beginning in pay period in which wages exceed $200,000 for calendar year without regard to: • Employee’s filing status • His or her income from other sources • Employer could be required to withhold additional tax even if you don’t owe it TIP: You can’t ask your employer to stop withholding the tax, but you can claim a credit for it on your tax return. [Insert your logo here]