Friday, January 11, 2013

Medical Device Tax Victim: Braces



How many "See, I told you so" columns  will I write this year?  Obamacare is killing jobs and putting families in hardships.  How many of you parents know your child needs braces?  Bet you didn't think "braces" were considered medical devices.  But they are.  Bad news...they will costs more.

And so are wheelchairs, canes, dialysis machines, pacemakers, latex gloves, insulin pumps, catheters, and so on and so on.  

Obamacare caps flexible spending accounts that many employees use to help cover out of pocket health and dental expenses.  And if you itemize and include medical expenses?  Too bad.  Read below.

Braces for the Kids Just Got More Expensive: Obamacare Tax Hike Case Study

In 2013, the tax increases in Obamacare will increasingly conspire against kitchen-table family healthcare decisions. 
 
As just one example, below are some of the taxes that will impact the purchase of dental braces:

Obamacare Medical Device Tax:  As of Jan.1, Obamacare imposes a new tax of 2.3 percent on medical device manufacturers, including those who make dental braces.  The tax is imposed on gross sales -- even if the company does not earn a profit in a given year.  While the tax will be paid to the IRS by the manufacturer, the tax will be passed along as a higher cost of the product, ultimately to be borne by the parent buying the braces for their child.  With the cost of braces being as high as $7,625 this new tax could raise the cost of these braces by $175.

Obamacare Flexible Spending Account Cap:  As of Jan. 1, the 30-35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face a new government cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap.) A parent looking to sock away extra money to pay for braces would find themselves quickly hitting this new cap, meaning they would have to pony up some or all of the cost with after-tax dollars.  Needless to say, this tax will especially impact middle class families.

Obamacare “Haircut” to the Medical Itemized Deduction:  Faced with higher prices for braces and a reduced ability to pay for them with their FSA, parents might decide to deduct the cost of braces on their tax returns.  Unfortunately, Obamacare makes this harder, too. 

Read more: http://atr.org/braces-kids-more-expensive-obamacare-tax-a7407#ixzz2HgvvGl4m
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