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Turbotax 2010 download Publication 225 - Introductory Material Table of Contents IntroductionOrdering forms and publications. Turbotax 2010 download Tax questions. Turbotax 2010 download Future Developments What's New for 2013 What's New for 2014 Reminders Introduction You are in the business of farming if you cultivate, operate, or manage a farm for profit, either as owner or tenant. Turbotax 2010 download A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. Turbotax 2010 download It also includes plantations, ranches, ranges, and orchards. Turbotax 2010 download This publication explains how the federal tax laws apply to farming. Turbotax 2010 download Use this publication as a guide to figure your taxes and complete your farm tax return. Turbotax 2010 download If you need more information on a subject, get the specific IRS tax publication covering that subject. Turbotax 2010 download We refer to many of these free publications throughout this publication. Turbotax 2010 download See chapter 16 for information on ordering these publications. Turbotax 2010 download The explanations and examples in this publication reflect the Internal Revenue Service's interpretation of tax laws enacted by Congress, Treasury regulations, and court decisions. Turbotax 2010 download However, the information given does not cover every situation and is not intended to replace the law or change its meaning. Turbotax 2010 download This publication covers subjects on which a court may have made a decision more favorable to taxpayers than the interpretation of the Service. Turbotax 2010 download Until these differing interpretations are resolved by higher court decisions, or in some other way, this publication will continue to present the interpretation of the Service. Turbotax 2010 download The IRS Mission. Turbotax 2010 download   Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. Turbotax 2010 download Comments and suggestions. Turbotax 2010 download   We welcome your comments about this publication and your suggestions for future editions. Turbotax 2010 download   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. Turbotax 2010 download NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Turbotax 2010 download Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Turbotax 2010 download   You can email us at taxforms@irs. Turbotax 2010 download gov. Turbotax 2010 download Please put “Publications Comment” on the subject line. Turbotax 2010 download You can also send us comments from www. Turbotax 2010 download irs. Turbotax 2010 download gov/formspubs/, select “Comment on Tax Forms and Publications” under “More Information. Turbotax 2010 download ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Turbotax 2010 download Ordering forms and publications. Turbotax 2010 download   Visit www. Turbotax 2010 download irs. Turbotax 2010 download gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Turbotax 2010 download Internal Revenue Service 1201 N. Turbotax 2010 download Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Turbotax 2010 download   If you have a tax question, check the information available on IRS. 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Turbotax 2010 download The website is available for farmers and ranchers, other agricultural producers, Extension educators, and any one interested in learning about the tax side of the agricultural community. Turbotax 2010 download Members of the National Farm Income Tax Extension Committee are contributors for the website and the website is hosted by Utah State University Cooperative Extension. Turbotax 2010 download You can visit the website at www. Turbotax 2010 download ruraltax. Turbotax 2010 download org. Turbotax 2010 download Future Developments The IRS has created a page on IRS. Turbotax 2010 download gov for information about Publication 225, at  www. Turbotax 2010 download irs. Turbotax 2010 download gov/pub225. Turbotax 2010 download Information about recent developments affecting Publication 225 will be posted on that page. Turbotax 2010 download What's New for 2013 The following items highlight a number of administrative and tax law changes for 2013. Turbotax 2010 download They are discussed in more detail throughout the publication. Turbotax 2010 download Standard mileage rate. Turbotax 2010 download  For 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 56. Turbotax 2010 download 5 cents. Turbotax 2010 download See chapter 4. Turbotax 2010 download Simplified method for business use of home deduction. Turbotax 2010 download  The IRS now provides a simplified method to determine your expenses for business use of your home. Turbotax 2010 download For more information, see Schedule C (Form 1040), Part II, and its instructions. Turbotax 2010 download See chapter 4. Turbotax 2010 download Increased section 179 expense deduction dollar limits. Turbotax 2010 download  The maximum amount you can elect to deduct for most section 179 property you placed in service in 2013 is $500,000. Turbotax 2010 download This limit is reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2 million. Turbotax 2010 download See chapter 7. Turbotax 2010 download Extension of special depreciation allowance for certain qualified property acquired after December 31, 2007. Turbotax 2010 download  You may be able to take a 50% special depreciation allowance for certain qualified property acquired after December 31, 2007, and placed in service before January 1, 2014. Turbotax 2010 download See chapter 7. Turbotax 2010 download Expiration of the 3-year recovery period for certain race horses. Turbotax 2010 download . Turbotax 2010 download  The 3-year recovery period for race horses two years old or younger will expire for such horses placed in service after December 31, 2013. Turbotax 2010 download See chapter 7. Turbotax 2010 download Tax rates. Turbotax 2010 download  For tax years beginning in 2013, the social security part of the self-employment tax increases from 10. Turbotax 2010 download 4% to 12. Turbotax 2010 download 4%. Turbotax 2010 download As a result, the self-employment tax is increased from 13. Turbotax 2010 download 3% to 15. Turbotax 2010 download 3%. Turbotax 2010 download See chapter 12. Turbotax 2010 download Maximum net earnings. Turbotax 2010 download  The maximum net self-employment earnings subject to the social security part (12. Turbotax 2010 download 4%) of the self-employment tax increased to $113,700 for 2013. Turbotax 2010 download There is no maximum limit on earnings subject to the Medicare part (2. Turbotax 2010 download 9%). Turbotax 2010 download See chapter 12. Turbotax 2010 download Net investment income tax. Turbotax 2010 download  For tax years beginning in 2013, individuals, estates, and trusts may be subject to the net investment income tax (NIIT). Turbotax 2010 download If you are a trader in financial instruments and commodities and required to file Schedule C (Form 1040), your investment income (for purposes of the NIIT) may be reduced by your interest and other investment expenses to the extent those expenses are not used to reduce your self-employment income. Turbotax 2010 download For information about NIIT and the special rule for traders in financial instruments and commodities, see the Instructions for Form 8960. Turbotax 2010 download Social Security and Medicare Tax for 2013. Turbotax 2010 download  The employee tax rate for social security is 6. Turbotax 2010 download 2%. Turbotax 2010 download The employer tax rate for social security remains unchanged at 6. Turbotax 2010 download 2%. Turbotax 2010 download The social security wage base limit is $113,700. Turbotax 2010 download The Medicare tax rate is 1. Turbotax 2010 download 45% each for the employee and employer, unchanged from 2012. Turbotax 2010 download There is no wage base limit for Medicare tax. Turbotax 2010 download See chapter 13. Turbotax 2010 download Additional Medicare Tax. Turbotax 2010 download  For tax years beginning in 2013, a 0. Turbotax 2010 download 9% Additional Medicare Tax applies to your Medicare wages, Railroad Tax Act (RRTA) compensation, and self-employment income above a threshold amount. Turbotax 2010 download Use Form 8959, Additional Medicare Tax, to figure this tax. Turbotax 2010 download For more information, see the Instructions for Form 8959 and the Instructions for Schedule SE (Form 1040). Turbotax 2010 download In addition to withholding Medicare tax at 1. Turbotax 2010 download 45%, you must withhold a 0. Turbotax 2010 download 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 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Turbotax 2010 download See chapter 13. Turbotax 2010 download Leave-Based donation programs to aid victims of Hurricane Sandy. Turbotax 2010 download  Under these programs, employees may donate their vacation, sick, or personal leave in exchange for employer cash payments made before January 1, 2014, to qualified tax-exempt organizations providing relief for the victims of Hurricane Sandy. Turbotax 2010 download The donated leave will not be included in the income or wages of the employee. Turbotax 2010 download The employer may deduct the cash payments as business expenses or charitable contributions. Turbotax 2010 download See chapter 13. Turbotax 2010 download Work opportunity tax credit for qualified tax-exempt organizations hiring qualified veterans extended. Turbotax 2010 download  The work opportunity tax credit is now available for eligible unemployed veterans who begin work before January 1, 2014. Turbotax 2010 download Qualified tax-exempt organizations that hire eligible unemployed veterans can claim the work opportunity tax credit against their payroll tax liability using Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans. Turbotax 2010 download For more information, visit IRS. Turbotax 2010 download gov and enter “work opportunity credit” in the search box. Turbotax 2010 download See chapter 13. Turbotax 2010 download Estimated tax. Turbotax 2010 download  For tax years beginning in 2013, the Net Investment Income Tax (NIIT) may need to be included when calculating your estimated tax. Turbotax 2010 download Also, when figuring your estimated tax, you may need to include the 0. Turbotax 2010 download 9% Additional Medicare Tax applicable to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above the threshold amount based on your filing status. Turbotax 2010 download For more information, see Publication 505. Turbotax 2010 download What's New for 2014 Maximum net earnings. Turbotax 2010 download  The maximum net self-employment earnings subject to the social security part of the self-employment tax for 2014 will be discussed in the 2013 Publication 334. Turbotax 2010 download See chapter 12. Turbotax 2010 download Social security and Medicare tax for 2014. Turbotax 2010 download  The employee and employer tax rates for social security and the maximum amount of wages subject to social security tax for 2014 will be discussed in Publication 51 (Circular A), Agricultural Employer's Tax Guide (For use in 2014). Turbotax 2010 download The Medicare tax rate for 2014 will also be discussed in Publication 51 (Circular A) (For use in 2014). Turbotax 2010 download There is no limit on the amount of wages subject to Medicare tax. Turbotax 2010 download See chapter 13. Turbotax 2010 download Reminders The following reminders and other items may help you file your tax return. Turbotax 2010 download   IRS e-file (Electronic Filing) You can file your tax returns electronically using an IRS e-file option. Turbotax 2010 download The benefits of IRS e-file include faster refunds, increased accuracy, and acknowledgment of IRS receipt of your return. Turbotax 2010 download You can use one of the following IRS e-file options. Turbotax 2010 download Use an authorized IRS e-file provider. Turbotax 2010 download Use a personal computer. Turbotax 2010 download Visit a Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) site. Turbotax 2010 download For details on these fast filing methods, see your income tax package. Turbotax 2010 download Principal agricultural activity codes. Turbotax 2010 download  You must enter on line B of Schedule F (Form 1040) a code that identifies your principal agricultural activity. Turbotax 2010 download It is important to use the correct code because this information will identify market segments of the public for IRS Taxpayer Education programs. Turbotax 2010 download The U. Turbotax 2010 download S. Turbotax 2010 download Census Bureau also uses this information for its economic census. Turbotax 2010 download See the list of Principal Agricultural Activity Codes on page 2 of Schedule F (Form 1040). Turbotax 2010 download Publication on employer identification numbers (EIN). Turbotax 2010 download  Publication 1635, Understanding Your Employer Identification Number, provides general information on employer identification numbers. Turbotax 2010 download Topics include how to apply for an EIN and how to complete Form SS-4. Turbotax 2010 download Change of address. Turbotax 2010 download  If you change your home address, you should use Form 8822, Change of Addres, to notify the IRS. Turbotax 2010 download If you change your business address, you should use Form 8822-B, Change of Address or Responsible Party — Business, to notify the IRS. Turbotax 2010 download Be sure to include your suite, room, or other unit number. Turbotax 2010 download Reportable transactions. Turbotax 2010 download  You must file Form 8886, Reportable Transaction Disclosure Statement, to report certain transactions. Turbotax 2010 download You may have to pay a penalty if you are required to file Form 8886 but do not do so. Turbotax 2010 download Reportable transactions include (1) transactions the same as or substantially similar to tax avoidance transactions identified by the IRS, (2) transactions offered to you under conditions of confidentiality and for which you paid an advisor a minimum fee, (3) transactions for which you have or a related party has a right to a full or partial refund of fees if all or part of the intended tax consequences from the transaction are not sustained, (4) transactions that result in losses of at least $2 million in any single year or $4 million in any combination of years, and (5) transactions with asset holding periods of 45 days or less and that result in a tax credit of more than $250,000. Turbotax 2010 download For more information, see the Instructions for Form 8886. Turbotax 2010 download Form W-4 for 2014. Turbotax 2010 download  You should make new Forms W-4 available to your employees and encourage them to check their income tax withholding for 2014. Turbotax 2010 download Those employees who owed a large amount of tax or received a large refund for 2013 may need to submit a new Form W-4. Turbotax 2010 download See Publication 919, How Do I Adjust My Tax Withholding. Turbotax 2010 download Form 1099-MISC. Turbotax 2010 download  Generally, file Form 1099-MISC if you pay at least $600 in rents, services, and other miscellaneous payments in your farming business to an individual (for example, an accountant, an attorney, or a veterinarian) who is not your employee. Turbotax 2010 download Limited Liability Company (LLC). Turbotax 2010 download  For purposes of this publication, a limited liability company (LLC) is a business entity organized in the United States under state law. Turbotax 2010 download Unlike a partnership, all of the members of an LLC have limited personal liability for its debts. Turbotax 2010 download An LLC may be classified for federal income tax purposes as a partnership, corporation, or an entity disregarded as separate from its owner by applying the rules in Regulations section 301. Turbotax 2010 download 7701-3. Turbotax 2010 download See Publication 3402 for more details. Turbotax 2010 download Photographs of missing children. Turbotax 2010 download  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Turbotax 2010 download Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Turbotax 2010 download You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Turbotax 2010 download Prev  Up  Next   Home   More Online Publications
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Affordable Care Act Tax Provisions

Check out the new Affordable Care Act Tax Provisions Home Page

Información en Español: Disposiciones de La Ley del Cuidado de Salud de Bajo Precio
 

Update

The open enrollment period to purchase health insurance coverage for 2014 through the Health Insurance Marketplace runs from Oct. 1, 2013, through March 31, 2014. If you are seeking information about how to obtain health care coverage or financial assistance to purchase health care coverage for you and your family, visit the Health and Human Services website, HealthCare.gov.

Effect of Sequestration on Small Business Health Care Tax Credit

Pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments issued to certain small tax-exempt employers claiming the refundable portion of the Small Business Health Care Tax Credit under Internal Revenue Code Section 45R, are subject to sequestration. This means that refund payments processed on or after Oct.1, 2013, and on or before Sept. 30, 2014, to a Section 45R applicant will be reduced by the fiscal year 2014 sequestration rate of 7.2 percent, irrespective of when the original or amended tax return was received by the IRS. The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise impacts the sequester, at which time the sequestration reduction rate is subject to change.

Affected taxpayers will be notified through correspondence that a portion of their requested payment was subject to the sequester reduction and the amount.

IRC §7216, Disclosure or Use of Information by Tax Return Preparers

Final Treasury Regulations on rules and consent requirements relating to the disclosure or use of tax return information by tax return preparers became effective Dec. 28, 2012. For additional information about how these apply to services and education related to the Affordable Care Act, please see our questions and answers

Medical Loss Ratio (MLR)

Beginning in 2011, insurance companies are required to spend a specified percentage of premium dollars on medical care and quality improvement activities, meeting a medical loss ratio (MLR) standard. Insurance companies that are not meeting the MLR standard will be required to provide rebates to their consumers beginning in 2012. For information on the federal tax consequences to an insurance company that pays a MLR rebate and an individual policyholder who receives a MLR rebate, as well as information on the federal tax consequences to employees if a MLR rebate stems from a group health insurance policy, see our frequently asked questions.

Reporting Employer Provided Health Coverage in Form W-2

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD. Many employers are eligible for transition relief for tax-year 2012 and beyond, until the IRS issues final guidance for this reporting requirement.

The amount reported does not affect tax liability, as the value of the employer excludible contribution to health coverage continues to be excludible from an employee's income, and it is not taxable. This reporting is for informational purposes only, to show employees the value of their health care benefits.

More information about the reporting can be found on Form W-2 Reporting of Employer-Sponsored Health Coverage.

Net Investment Income Tax

A new Net Investment Income Tax went into effect on Jan. 1, 2013. The 3.8 percent Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts. On Nov. 26, 2013, the IRS and the Treasury Department issued final regulations, which provide guidance on the general application of the Net Investment Income Tax and the computation of Net Investment Income. In addition, on Nov. 26, 2013, the IRS and the Treasury Department issued proposed regulations on the computation of net investment income as it relates to certain specific types of property. Comments may be submitted electronically, by mail or hand delivered to the IRS. For additional information on the Net Investment Income Tax, see our questions and answers.

Additional Medicare Tax

A new Additional Medicare Tax went into effect on Jan. 1, 2013. The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation and self-employment income that exceeds a threshold amount based on the individual’s filing status. The threshold amounts are $250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers. An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year. On Nov. 26, 2013, the IRS and the Department of the Treasury issued final regulations which provide guidance for employers and individuals relating to the implementation of Additional Medicare Tax, including the requirement to withhold Additional Medicare Tax on certain wages and compensation, the requirement to report Additional Medicare Tax, and the employer process for adjusting underpayments and overpayments of Additional Medicare Tax. In addition, the regulations provide guidance on the employer and individual processes for filing a claim for refund for an overpayment of Additional Medicare Tax. For additional information on the Additional Medicare Tax, see our questions and answers.

Minimum Value

On April 26, 2012, the Department of the Treasury and IRS issued Notice 2012-31, which provides information and requested public comment on an approach to determining whether an eligible employer-sponsored health plan provides minimum value. Additionally, on April 30, 2013, the Treasury Department and the IRS issued proposed regulations relating to minimum value of eligible employer-sponsored plans and other rules regarding the premium tax credit. Starting in 2014, whether such a plan provides minimum value will be relevant to eligibility for the premium tax credit and application of the employer shared responsibility payment.

Information Reporting on Health Coverage by Employers

On March 5, 2014, the Department of the Treasury and IRS issued final regulations on employer health insurance coverage information reporting. The information reporting relates to health insurance coverage that is offered by certain employers, referred to as applicable large employers, and reporting is to be provided by each member of an applicable large employer. Additionally, on July 9, 2013, the Department of the Treasury and the IRS issued Notice 2013-45, announcing transition relief for 2014 from this annual information reporting. Learn more about this reporting requirement by reading the fact sheet issued by the U.S. Department of the Treasury.

Information Reporting on Health Coverage by Insurers

On March 5, 2014, the Department of the Treasury and IRS issued final regulations on minimum essential coverage information reporting. The information reporting is to be provided by health insurance issuers, certain sponsors of self-insured plans, government agencies and certain other parties that provide health coverage. Additionally, on July 9, 2013, the Department of the Treasury and the IRS issued Notice 2013-45 announcing transition relief for 2014 from this annual information reporting. Learn more about this reporting requirement by reading the fact sheet issued by the U.S. Department of the Treasury.

Disclosure of Return Information

On Aug. 13, 2013, the Department of the Treasury and the IRS issued final regulations with rules for disclosure of return information to the Department of Health and Human Services that will be used to carry out eligibility determinations for advance payments of the premium tax credit, Medicaid and other health insurance affordability programs. For additional information on the final regulations, see our questions and answers.

Small Business Health Care Tax Credit

This credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees and is specifically targeted for those with low- and moderate-income workers. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees. On Aug. 23, 2013, the Department of Treasury and the IRS issued proposed regulations, which include information on the transition of eligibility for the credit and requiring the purchase of insurance coverage through an Affordable Insurance Exchange (also known as a Health Insurance Marketplace). Additionally, IRS Notice 2014-06 provides transition relief for employers in certain counties in Washington and Wisconsin with no SHOP coverage available. Learn more by browsing our page on the Small Business Health Care Tax Credit for Small Employers.

Application of the Affordable Care Act to Health Reimbursement Arrangements, Health Flexible Spending Arrangements and Certain Other Employer Healthcare Arrangements

The Affordable Care Act’s market reforms apply to group health plans. On Sept. 13, 2013, the IRS issued Notice 2013-54, which explains how the Affordable Care Act’s market reforms apply to certain types of group health plans, including health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) and certain other employer healthcare arrangements, including arrangements under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy. The notice also provides guidance on employee assistance programs or EAPs and on section 125(f)(3), which prohibits the use of pre-tax employee contributions to cafeteria plans to purchase coverage on an Affordable Insurance Exchange (also known as a Health Insurance Marketplace). The notice applies for plan years beginning on and after Jan. 1, 2014, but taxpayers may apply the guidance provided in the notice for all prior periods.  

DOL has issued a notice in substantially identical form to Notice 2013-54, DOL Technical Release 2013-03, and HHS will shortly issue guidance to reflect that it concurs with Notice 2013-54. On Jan. 24, 2013, DOL and HHS issued FAQs that addressed the application of the Affordable Care Act to HRAs.

On Jan. 9, 2014, DOL and HHS issued FAQs that addressed, among other things, future rules relating to excepted benefits.

Health Flexible Spending Arrangements

Effective Jan. 1, 2011, the cost of an over-the-counter medicine or drug cannot be reimbursed from Flexible Spending Arrangements (FSAs) or health reimbursement arrangements unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. This standard applies only to purchases made on or after Jan. 1, 2011. A similar rule went into effect on Jan. 1, 2011, for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs). Employers and employees should take these changes into account as they make health benefit decisions. For more information, see news release IR-2010-95, Notice 2010-59, Revenue Ruling 2010-23 and our questions and answers. FSA and HRA participants can continue using debit cards to buy prescribed over-the-counter medicines, if requirements are met. For more information, see news release IR-2010-128 and Notice 2011-5. Additionally, Notice 2013-57 provides information about the definition of preventive care for purposes of high deductible health plans associated with HSAs. 

In addition, starting in 2013, there are new rules about the amount that can be contributed to an FSA. Notice 2012-40 provides information about these rules and flexibility for employers applying the new rules. On Oct. 31, 2013, the Department of the Treasury and IRS issued Notice 2013-71, which provides information on a new $500 carryover option for employer-sponsored healthcare flexible spending arrangements. Learn more by reading the news release issued by the U.S. Department of the Treasury.

Further, Notice 2013-54 provides guidance regarding the application of the Affordable Care Act’s market reforms to certain health FSAs.   

Medical Device Excise Tax

On Dec. 5, 2012, the IRS and the Department of the Treasury issued final regulations on the new 2.3-percent medical device excise tax (IRC §4191) that manufacturers and importers will pay on their sales of certain medical devices starting in 2013. On Dec. 5, 2012, the IRS and the Department of the Treasury also issued Notice 2012-77, which provides interim guidance on certain issues related to the medical device excise tax. Additional information is available on the Medical Device Excise Tax page and Medical Device Excise Tax FAQs on IRS.gov.

Changes to Itemized Deduction for Medical Expenses

Beginning Jan. 1, 2013, you can claim deductions for medical expenses not covered by your health insurance when they reach 10 percent of your adjusted gross income. This change affects your 2013 tax return that you will file in 2014. There is a temporary exemption from Jan. 1, 2013, to Dec. 31, 2016, for individuals age 65 and older and their spouses. For additional information, see our questions and answers.

Health Insurance Premium Tax Credit

Starting in 2014, individuals and families can take a new premium tax credit to help them afford health insurance coverage purchased through an Affordable Insurance Exchange (also known as a Health Insurance Marketplace). The premium tax credit is refundable so taxpayers who have little or no income tax liability can still benefit. The credit also can be paid in advance to a taxpayer’s insurance company to help cover the cost of premiums. On May 18, 2012, the Department of the Treasury and the IRS issued final regulations, which provide guidance for individuals who enroll in qualified health plans through Marketplaces and claim the premium tax credit, and for Marketplaces that make qualified health plans available to individuals and employers. On Jan. 30, 2013, the Department of the Treasury and IRS released final regulations on the premium tax credit affordability test for related individuals. On April 30, 2013, the Department of the Treasury and the IRS issued proposed regulations relating to minimum value of eligible employer-sponsored plans and other rules regarding the premium tax credit. Additionally, Notice 2013-41, issued on June 26, 2013, provides information for determining whether or when individuals are considered eligible for coverage under certain Medicaid, Medicare, CHIP, TRICARE, student health or state high-risk pool programs. This determination will affect whether the individual is eligible for the premium tax credit. On June 28, 2013, the Department of the Treasury and IRS issued proposed regulations on the new reporting requirements for Marketplaces. Notice 2014-23 was issued on March 26, 2014, and allows certain victims of domestic abuse to claim the premium tax credit while filing a return using the Married Filing Separately filing status for the 2014 calendar year. For more information on the credit, see our premium tax credit page and our questions and answers.

Individual Shared Responsibility Provision

Starting in 2014, the Individual Shared Responsibility provision calls for each individual to either have minimum essential coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. On Aug. 27, 2013, the Department of the Treasury and the IRS issued final regulations on the Individual Shared Responsibility provision. On Jan. 23, 2014, the Department of the Treasury and the IRS issued proposed regulations addressing several issues that were identified in the preamble to the final regulations. In particular, the proposed regulations provide that certain limited-benefit Medicaid and TRICARE coverage is not minimum essential coverage. The proposed regulations also address the treatment of health reimbursement arrangements and wellness program incentives for purposes of determining the exemption for individuals who cannot afford employer-sponsored coverage. Comments are due April 28, 2014, and may be submitted electronically, by mail or hand delivered to the IRS. Additionally, because individuals may not be aware that these limited-benefit government health programs are not minimum essential coverage at the time of enrollment, Notice 2014-10, issued on Jan. 23, 2014, provides transition relief from the shared responsibility payment for months in 2014 in which individuals have certain Medicaid coverage or limited-benefit coverage under chapter 55 of title 10, U.S.C. For additional information on the Individual Shared Responsibility provision, the final regulations and Notice 2013-42, see our ISRP page and questions and answers. Additional information on exemptions and minimum essential coverage is available in final regulations issued by the U.S. Department of Health & Human Services. The open enrollment period to purchase health insurance coverage for 2014 through the Health Insurance Marketplace runs from Oct. 1, 2013, through March 31, 2014.

Health Coverage for Older Children

Health coverage for an employee's children under 27 years of age is now generally tax-free to the employee. This expanded health care tax benefit applies to various work place and retiree health plans. These changes immediately allow employers with cafeteria plans –– plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits –– to permit employees to begin making pre-tax contributions to pay for this expanded benefit. This also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return. Learn more by reading our news release or this notice.

Excise Tax on Indoor Tanning Services

A 10-percent excise tax on indoor UV tanning services went into effect on July 1, 2010. Payments are made along with Form 720, Quarterly Federal Excise Tax Return. The tax doesn't apply to phototherapy services performed by a licensed medical professional on his or her premises. There's also an exception for certain physical fitness facilities that offer tanning as an incidental service to members without a separately identifiable fee. For more information on the tax and how it is administered, see the Indoor Tanning Services Tax Center.

Adoption Credit

For tax years 2010 and 2011, the Affordable Care Act raised the maximum adoption credit per child and the credit was refundable. For more information related to the adoption credit for tax years 2010 and 2011, see our news release, tax tip, questions and answers, flyer, Notice 2010-66, Revenue Procedure 2010-31, Revenue Procedure 2010-35 and Revenue Procedure 2011-52.

For tax year 2012, the credit has reverted to being nonrefundable, with a maximum amount (dollar limitation) of $12,650 per child. If you adopted a child in 2012, see Tax Topic 607 for more information. 

Transitional Reinsurance Program

The ACA requires all health insurance issuers and self-insured group health plans to make contributions under the transitional Reinsurance Program to support payments to individual market issuers that cover high-cost individuals. For information on the tax treatment of contributions made under the Reinsurance Program, see our frequently asked questions.

Medicare Shared Savings Program

The Affordable Care Act establishes a Medicare shared savings program (MSSP) which encourages Accountable Care Organizations (ACOs) to facilitate cooperation among providers to improve the quality of care provided to Medicare beneficiaries and reduce unnecessary costs. More information can be found in Notice 2011-20, which solicited written comments regarding what additional guidance, if any, is needed for tax-exempt organizations participating in the MSSP through an ACO. This guidance also addresses the participation of tax-exempt organizations in non-MSSP activities through ACOs. Additional information on the MSSP is available on the Department of Health and Human Services website.

The Centers for Medicare and Medicaid Services has released final regulations describing the rules for the Shared Savings Program and accountable care organizations. Fact Sheet 2011-11 confirms that Notice 2011-20 continues to reflect IRS expectations regarding the Shared Savings Program and ACOs, and provides additional information for charitable organizations that may wish to participate.

Qualified Therapeutic Discovery Project Program

This program was designed to provide tax credits and grants to small firms that show significant potential to produce new and cost-saving therapies, support U.S. jobs and increase U.S. competitiveness. Applicants were required to have their research projects certified as eligible for the credit or grant. IRS guidance describes the application process.

Submission of certification applications began June 21, 2010, and applications had to be postmarked no later than July 21, 2010, to be considered for the program. Applications that were postmarked by July 21, 2010, were reviewed by both the Department of Health and Human Services (HHS) and the IRS. All applicants were notified by letter dated October 29, 2010, advising whether or not the application for certification was approved. For those applications that were approved, the letter also provided the amount of the grant to be awarded or the tax credit the applicant was eligible to take.

The IRS published the names of the applicants whose projects were approved as required by law. Listings of results are available by state.

Learn more by reading the IRS news release, the news release issued by the U.S. Department of the Treasury, the page on the HHS website and our questions and answers.

Group Health Plan Requirements

The Affordable Care Act establishes a number of new requirements for group health plans. Interim guidance on changes to the nondiscrimination requirements for group health plans can be found in Notice 2011-1, which provides that employers will not be subject to penalties until after additional guidance is issued. Additionally, TD 9575 and REG-140038-10, issued by DOL, HHS and IRS, provide information on the summary of benefits and coverage and the uniform glossary. Notice 2012-59 provides guidance to group health plans on the waiting periods they may apply before coverage starts. On March 19, 2013, HHS, DOL and IRS issued proposed regulations on the ninety-day waiting period limitation.. 

More information on group health plan requirements is available on the websites of the Departments of Health and Human Services and Labor and in additional guidance.

Further, Notice 2013-54 provides guidance regarding the application of the Affordable Care Act’s market reforms to certain types of group health plans, including health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) and certain other employer healthcare arrangements, including arrangements under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy. 

Annual Fee on Health Insurance Providers

The Affordable Care Act created an annual fee on certain health insurance providers beginning in 2014. On Nov. 26, 2013, the Treasury Department and IRS issued final regulations on this annual fee imposed on covered entities engaged in the business of providing health insurance for United States health risks.

For additional information visit our Affordable Care Act Provision 9010 - Health Insurance Providers Fee page

Tax-Exempt 501(c)(29) Qualified Nonprofit Health Insurance Issuers

The Affordable Care Act requires the Department of Health and Human Services (HHS) to establish the Consumer Operated and Oriented Plan program (CO-OP program). It also provides for tax exemption for recipients of CO-OP program grants and loans that meet additional requirements under section 501(c)(29). IRS Notice 2011-23 outlined the requirements for tax exemption under section 501(c)(29) and solicited written comments regarding these requirements as well as the application process. Revenue Procedure 2012-11, issued in conjunction with temporary regulations and a notice of proposed rulemaking, sets out the procedures for issuing determination letters and rulings on the exempt status of organizations applying for recognition of exemption under 501(c)(29).

An overview of the CO-OP program is available on the HHS website.

Medicare Part D Coverage Gap “donut hole” Rebate

The Affordable Care Act provides a one-time $250 rebate in 2010 to assist Medicare Part D recipients who have reached their Medicare drug plan’s coverage gap. This payment is not taxable. This payment is not made by the IRS. More information can be found at www.medicare.gov.

Additional Requirements for Tax-Exempt Hospitals

The Affordable Care Act added new requirements for charitable hospitals (see Notice 2010-39 and Notice 2011-52). On June 26, 2012, the IRS published proposed regulations that provide information on the requirements for charitable hospitals relating to financial assistance and emergency medical care policies, charges for emergency or medically necessary care provided to individuals eligible for financial assistance, and billing and collections. On April 5, 2013, the IRS published proposed regulations on the requirement that charitable hospitals conduct community health needs assessments (CHNAs) and adopt implementation strategies at least once every three years. These proposed regulations also discuss the related excise tax and reporting requirements for charitable hospitals and the consequences for failure to satisfy the section 501(r) requirements. On August 15, 2013, the IRS published temporary regulations and proposed regulations providing information on which form to use when making an excise tax payment for failure to meet the CHNA requirements and the due date for filing the form. Notice 2014-2 confirms that hospital organizations can rely on proposed regulations under section 501(r) of the Internal Revenue Code published on June 26, 2012 and April 5, 2013, pending the publication of final regulations or other applicable guidance. Notice 2014-3 contains a proposed revenue procedure that provides correction and disclosure procedures under which certain failures to meet the requirements of section 501(r) will be excused.

Annual Fee on Branded Prescription Pharmaceutical Manufacturers and Importers

The Affordable Care Act created an annual fee payable beginning in 2011 by certain manufacturers and importers of brand name pharmaceuticals. On Aug. 15, 2011, the IRS issued temporary regulations and a notice of proposed rulemaking on the branded prescription drug fee. The temporary regulations describe the rules related to the fee, including how it is computed and how it is paid. On Aug. 5, 2013, the IRS issued Notice 2013-51, which provides additional guidance on the branded prescription drug fee for the 2014 fee year. For information on the fee for the 2012 fee year and for the 2013 fee year, see Notice 2011-92 and Notice 2012-74.

For additional information, visit our Affordable Care Act Provision 9008 Branded Prescription Drug Fee page.

Modification of Section 833 Treatment of Certain Health Organizations

The Affordable Care Act amended section 833 of the Code, which provides special rules for the taxation of Blue Cross and Blue Shield organizations and certain other organizations that provide health insurance. IRS Notice 2010-79 provides transitional relief and interim guidance on the computation of an organization’s taxpayer’s Medical Loss Ratio (MLR) for purposes of section 833, the consequences of nonapplication and changes in accounting method. Notice 2011-04 provides additional information and the procedures for qualifying organizations to obtain automatic consent to change its method of accounting for unearned premiums. Notice 2012-37 extends the transitional relief and interim guidance provided in Notice 2010-79 for another year to any taxable year beginning in 2012 and the first taxable year beginning after Dec. 31, 2012. 

On January 6, 2014, the IRS issued final regulations that describe how the MLR for purposes of section 833 is computed.

Limitation on Deduction for Compensation Paid by Certain Health Insurance Providers (amended section 162(m))

The Affordable Care Act amended section 162(m) of the Code to limit the compensation deduction available to certain health insurance providers. The amendment goes into effect for taxable years beginning after Dec. 31, 2012, but may affect deferred compensation attributable to services performed in a taxable year beginning after Dec. 31, 2009. On April 1, 2013, the Treasury Department and IRS issued proposed regulations on this provision. 

Employer Shared Responsibility Payment

The Affordable Care Act establishes that certain employers must offer health coverage to their full-time employees or a shared responsibility payment may apply. On Feb. 10, 2014, the Department of the Treasury and the IRS issued final regulations on the Employer Shared Responsibility provisions. For additional information on the Employer Shared Responsibility provisions and the proposed regulations, see our questions and answers. On July 9, 2013, the Department of the Treasury and the IRS announced transition relief from the Employer Shared Responsibility provisions for 2014. For more information, please see Notice 2013-45. For additional transition relief generally applicable to 2015, see the preamble to the final regulations.  

Patient-Centered Outcomes Research Institute Fee

The Affordable Care Act imposes the Patient-Centered Outcomes Research Institute (PCORI). Funded by the Patient-Centered Outcomes Research Trust Fund, the institute will assist patients, clinicians, purchasers and policy-makers in making informed health decisions by advancing clinical effectiveness research. The trust fund will be funded in part by fees paid by issuers of certain health insurance policies and sponsors of certain self-insured health plans.

The IRS and the Department of the Treasury have issued final regulations on this fee. Additional information on the fee is available on the PCORI page and in our questions and answers and chart summaryForm 720, Quarterly Federal Excise Tax Return, was revised to provide for the reporting and payment of the PCORI fee.

Retiree Drug Subsidies

Under § 139A of the Internal Revenue Code, certain special subsidy payments for retiree drug coverage made under the Social Security Act  are not included in the gross income of plan sponsors. Plan sponsors receive these retiree drug subsidy payments based on the allowable retiree costs for certain qualified retiree prescription drug plans. For taxable years beginning on or after Jan. 1, 2013, new statutory rules affect the ability of plan sponsors to deduct costs that are reimbursed through these subsidies. See our questions and answers for more information.

For More Information

For tips, fact sheets, questions and answers, videos and more, see our Affordable Care Act of 2010: News Releases, Multimedia and Legal Guidance page.

Related Items:

Page Last Reviewed or Updated: 26-Mar-2014

 

The Turbotax 2010 Download

Turbotax 2010 download 4. Turbotax 2010 download   Deductions Table of Contents Standard DeductionStandard Deduction for Dependents Itemized DeductionsMedical and Dental Expenses Most taxpayers have a choice of taking a standard deduction or itemizing their deductions. Turbotax 2010 download You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. Turbotax 2010 download If you have a choice, you should use the method that gives you the lower tax. Turbotax 2010 download Standard Deduction The standard deduction amount depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer. Turbotax 2010 download Generally, the standard deduction amounts are adjusted each year for inflation. Turbotax 2010 download In most cases, you can use Worksheet 4-1 to figure your standard deduction amount. Turbotax 2010 download Persons not eligible for the standard deduction. Turbotax 2010 download   Your standard deduction is zero and you should itemize any deductions you have if: You are married and filing a separate return, and your spouse itemizes deductions, You are filing a tax return for a short tax year because of a change in your annual accounting period, or You are a nonresident or dual-status alien during the year. Turbotax 2010 download You are considered a dual-status alien if you were both a nonresident alien and a resident alien during the year. Turbotax 2010 download   If you are a nonresident alien who is married to a U. Turbotax 2010 download S. Turbotax 2010 download citizen or resident alien at the end of the year, you can choose to be treated as a U. Turbotax 2010 download S. Turbotax 2010 download resident. Turbotax 2010 download See Publication 519, U. Turbotax 2010 download S. Turbotax 2010 download Tax Guide for Aliens. Turbotax 2010 download If you make this choice, you can take the standard deduction. Turbotax 2010 download Decedent's final return. Turbotax 2010 download   The amount of the standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. Turbotax 2010 download However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed. Turbotax 2010 download Higher standard deduction for age (65 or older). Turbotax 2010 download   If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. Turbotax 2010 download You are considered age 65 on the day before your 65th birthday. Turbotax 2010 download Therefore, you can take a higher standard deduction for 2013 if you were born before January 2, 1949. Turbotax 2010 download Higher standard deduction for blindness. 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Turbotax 2010 download However, the standard deduction may be higher if the individual is 65 or older or blind. Turbotax 2010 download If an exemption for you (or your spouse if you are filing jointly) can be claimed on someone else's return, use Worksheet 4-1, if applicable, to determine your standard deduction. Turbotax 2010 download Worksheet 4-1. Turbotax 2010 download 2013 Standard Deduction Worksheet Caution. Turbotax 2010 download If you are married filing separately and your spouse itemizes deductions, or if you are a dual-status alien, do not complete this worksheet. Turbotax 2010 download If you were born before January 2, 1949, and/or blind, check the correct number of boxes below. Turbotax 2010 download Put the total number of boxes checked in box c and go to line 1. Turbotax 2010 download a. Turbotax 2010 download You   Born before  January 2, 1949     Blind b. Turbotax 2010 download Your spouse, if claiming  spouse's exemption   Born before January 2, 1949     Blind c. Turbotax 2010 download Total boxes checked             1. Turbotax 2010 download Enter the amount shown below for your filing status. Turbotax 2010 download               Single or married filing separately — $6,100 Married filing jointly or Qualifying widow(er) — $12,200 Head of household — $8,950   1. Turbotax 2010 download           2. Turbotax 2010 download Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?  No. Turbotax 2010 download Skip line 3; enter the amount from line 1 on line 4. Turbotax 2010 download   Yes. Turbotax 2010 download Go to line 3. Turbotax 2010 download         3. Turbotax 2010 download Is your earned income* more than $650?               Yes. Turbotax 2010 download Add $350 to your earned income. Turbotax 2010 download Enter the total   3. Turbotax 2010 download         No. Turbotax 2010 download Enter $1,000 4. Turbotax 2010 download Enter the smaller of line 1 or line 3 4. Turbotax 2010 download   5. 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Turbotax 2010 download A more extensive list of items and further details can be found in Publication 502, Medical and Dental Expenses. Turbotax 2010 download Table 4-1. 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Turbotax 2010 download 5% of your adjusted gross income if you or your spouse is age 65 or older). Turbotax 2010 download What to include. Turbotax 2010 download   Generally, you can include only the medical and dental expenses you paid this year, regardless of when the services were provided. Turbotax 2010 download If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. Turbotax 2010 download If you use a pay-by-phone or online account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. Turbotax 2010 download You can include medical expenses you charge to your credit card in the year the charge is made. Turbotax 2010 download It does not matter when you actually pay the amount charged. 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Turbotax 2010 download    Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment). Turbotax 2010 download Qualified long-term care insurance contracts. Turbotax 2010 download   A qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified long-term care services. Turbotax 2010 download The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits, and Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses. Turbotax 2010 download   The amount of qualified long-term care premiums you can include is limited. Turbotax 2010 download You can include the following as medical expenses on Schedule A (Form 1040). Turbotax 2010 download Qualified long-term care premiums up to the following amounts. Turbotax 2010 download Age 40 or under – $360. Turbotax 2010 download Age 41 to 50 – $680. Turbotax 2010 download Age 51 to 60 – $1,360. Turbotax 2010 download Age 61 to 70 – $3,640. Turbotax 2010 download Age 71 or over – $4,550. Turbotax 2010 download Unreimbursed expenses for qualified long-term care services. Turbotax 2010 download Note. Turbotax 2010 download The limit on premiums is for each person. Turbotax 2010 download Meals and Lodging You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if your main reason for being there is to receive medical care. Turbotax 2010 download You may be able to include in medical expenses the cost of lodging (but not meals) not provided in a hospital or similar institution. Turbotax 2010 download You can include the cost of such lodging while away from home if all of the following requirements are met. Turbotax 2010 download The lodging is primarily for, and essential to, medical care. Turbotax 2010 download The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. Turbotax 2010 download The lodging is not lavish or extravagant under the circumstances. Turbotax 2010 download There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. Turbotax 2010 download The amount you include in medical expenses for lodging cannot be more than $50 per night for each person. Turbotax 2010 download You can include lodging for a person traveling with the person receiving the medical care. Turbotax 2010 download For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Turbotax 2010 download (Meals are not included. Turbotax 2010 download ) Nursing home. Turbotax 2010 download   You can include in medical expenses the cost of medical care in a nursing home or a home for the aged for yourself, your spouse, or your dependent(s). Turbotax 2010 download This includes the cost of meals and lodging in the home if a main reason for being there is to get medical care. Turbotax 2010 download   Do not include the cost of meals and lodging if the reason for being in the home is personal. Turbotax 2010 download However, you can include in medical expenses the part of the cost that is for medical or nursing care. Turbotax 2010 download Medical Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. Turbotax 2010 download Policies can provide payment for: Hospitalization, surgical fees, X-rays, Prescription drugs and insulin, Dental care, Replacement of lost or damaged contact lenses, and Qualified long-term care insurance contracts (subject to the additional limits included in the discussion on qualified long-term care insurance contracts under Long-Term Care , earlier). Turbotax 2010 download If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. Turbotax 2010 download The cost of the medical portion must be separately stated in the insurance contract or given to you in a separate statement. Turbotax 2010 download Medicare Part A. Turbotax 2010 download   If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare Part A. Turbotax 2010 download The payroll tax paid for Medicare Part A is not a medical expense. Turbotax 2010 download If you are not covered under social security (or were not a government employee who paid Medicare tax), you can enroll voluntarily in Medicare Part A. Turbotax 2010 download In this situation you can include the premiums you paid for Medicare Part A as a medical expense. Turbotax 2010 download Medicare Part B. Turbotax 2010 download   Medicare Part B is a supplemental medical insurance. Turbotax 2010 download Premiums you pay for Medicare Part B are a medical expense. Turbotax 2010 download If you applied for it at age 65 or after you became disabled, you can include in medical expenses the monthly premiums you paid. Turbotax 2010 download If you were over age 65 or disabled when you first enrolled, check with your local Social Security Administration office, or go to their website at www. Turbotax 2010 download SSA. Turbotax 2010 download gov, to find out your premium. Turbotax 2010 download Medicare Part D. Turbotax 2010 download   Medicare Part D is a voluntary prescription drug insurance program for persons with Medicare Part A or Part B. Turbotax 2010 download You can include as a medical expense premiums you pay for Medicare Part D. Turbotax 2010 download Prepaid insurance premiums. Turbotax 2010 download   Insurance premiums you pay before you are age 65 for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: Payable in equal yearly installments, or more often, and Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years). Turbotax 2010 download Medicines You can include in medical expenses amounts you pay for prescribed medicines and drugs. Turbotax 2010 download A prescribed drug is one that requires a prescription by a doctor for its use by an individual. Turbotax 2010 download You can also include amounts you pay for insulin. Turbotax 2010 download Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. Turbotax 2010 download Imported medicines and drugs. Turbotax 2010 download   If you import medicines or drugs from other countries, see Medicines and Drugs From Other Countries, under What Expenses Are Not Includible, in Publication 502. Turbotax 2010 download Nursing Services You can include in medical expenses wages and other amounts you pay for nursing services. Turbotax 2010 download The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. Turbotax 2010 download This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. Turbotax 2010 download These services can be provided in your home or another care facility. Turbotax 2010 download Generally, only the amount spent for nursing services is a medical expense. Turbotax 2010 download If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services. Turbotax 2010 download However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Turbotax 2010 download See Maintenance and personal care services under Qualified long-term care services, earlier. Turbotax 2010 download Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. Turbotax 2010 download See Child and Dependent Care Credit , later, and Publication 503, Child and Dependent Care Expenses. Turbotax 2010 download You can also include in medical expenses part of the amount you pay for that attendant's meals. Turbotax 2010 download Divide the food expense among the household members to find the cost of the attendant's food. Turbotax 2010 download Then divide that cost in the same manner as in the preceding paragraph. Turbotax 2010 download If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. Turbotax 2010 download This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant. Turbotax 2010 download Employment taxes. Turbotax 2010 download   You can include as a medical expense social security tax, FUTA, Medicare tax, and state employment taxes you pay for a nurse, attendant, or other person who provides medical care. Turbotax 2010 download If the attendant also provides personal and household services, you can include as a medical expense only the amount of employment taxes paid for medical services as explained earlier under Nursing Services. Turbotax 2010 download For information on employment tax responsibilities of household employers, see Publication 926, Household Employer's Tax Guide. Turbotax 2010 download Transportation You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. Turbotax 2010 download Car expenses. Turbotax 2010 download    You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. Turbotax 2010 download You cannot include depreciation, insurance, general repair, or maintenance expenses. Turbotax 2010 download   If you do not want to use your actual expenses for 2013, you can use the standard medical mileage rate of 24 cents a mile. Turbotax 2010 download   You can also include parking fees and tolls. Turbotax 2010 download You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate. Turbotax 2010 download You can also include:    Bus, taxi, train, or plane fares or ambulance service, and Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone. Turbotax 2010 download Do not include transportation expenses if, for purely personal reasons, you choose to travel to another city for an operation or other medical care prescribed by your doctor. Turbotax 2010 download Prev  Up  Next   Home   More Online Publications