How Does ObamaCare Affect Tax Brackets?
Hi, i’m a High school student doing a paper on the Pros on Obama care for my English Class. My question is how would this affect my tax bracket.
Answer
The ACA doesn't directly affect tax brackets, however Americans can use a Health Savings Account to lower their household income. This can help them qualify for more cost assistance and potentially lower the rate at which they are taxed. Other deductions, like taking medical deductions over 10%, can also help lower taxable income but don't affect cost assistance amounts. There are lots of cool tax tricks and tips related to ObamaCare, but the ACA doesn't directly affect what tax bracket, despite affecting deductions and creating new taxes.
If the question is, "how does the ACA affect people at different tax brackets?" You would want to look at taxes and subsidies respectively. Aside from the mandate to have coverage, as a rule of thumb, subsidies affect those in the lower tax brackets, while taxes affect those in the highest tax brackets. You can compare the Federal Poverty Guidelines for 2014 to the new 2015 tax brackets to get an idea of who pays and who gets assistance.
Ps. That is one heck of a high school paper.