The 2010 Healthcare Act, known as “Obama care”, is being implemented gradually.  Now that sitting U.S. President, Barack Obama, has been reelected for a second term and the U.S. Senate continue under Democrats, it is highly unlikely that the Act will be eliminated during the second term.  Two new tax provisions will come into play in 2013.

First, a $2,500 annual maximum contribution limit will be in place for Flexible Spending Accounts (FSA).  In the past some plans limited annual contributions while others didn’t giving employees another tax free subtraction from their salary.  Funds can be used for qualified childcare as well as medical expenses.  The total contribution will be capped at $2,500 starting in 2013.

Second, the qualifying threshold for Itemized Medical Expense Deduction has been increased from 7.5 percent to ten percent for most individuals.  This applies to your medical expenses over 7.5 percent of Adjusted Gross Income (AGI).  However, if you reach age 65 before December 31, 2013, you can extend the current 7.5 percent limit until the tax year 2016.    If your spouse reach the age 65 in 2014 through 2016, the current 7.5 percent rate will continue through 2016.  Everyone will be subject to ten percent rate in 2017.