The health care law has provisions that may affect your personal income taxes. How the law may affect you may depend on your employment status, whether you participate in a tax favored health plan and your age.
Here are three tips about how the law may affect you:healthcare law
1. Employment Status

  • If you are employed your employer may report the value of the health insurance provided to you on your W-2 in Box 12 with Code DD.  However, it is not taxable.
  • If you are self-employed, you can deduct the cost of health insurance premiums, within limits, on your income tax return.

2. Tax Favored Health Plans

  • If you have a health flexible spending arrangement (FSA) at work, money you put into it normally reduces your taxable income.
  • If you have a health savings account (HSA) at work, money your employer puts into it for you, within limits, is not taxable.
  • Money you put into an HSA usually counts as a deduction and can lower your taxes.
  • Money you take from an HSA to use for qualified medical expenses is not taxable income; however, withdrawals for other purposes are taxable and can even be subject to an additional tax.
  • If you have a health reimbursement arrangement (HRA) at work, money you receive from it is generally not taxable.

3. Age

  • If you are age 65 or older, the threshold for itemized medical deductions remains at 7.5 percent of your Adjusted Gross Income (AGI) until 2017; for others the threshold increased to 10 percent of AGI in 2013. Your AGI is shown on your Form 1040 tax form.

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