Wednesday, April 7, 2010

Health care taxes are on their way....and fast....

The Tax Man Cometh: From GOP Conference

The Joint Committee on Taxation estimates people who use their HSAs, FSAs, or HRAs to pay for over the counter drugs that aren’t prescribed by a doctor will pay an additional $5 billion in taxes.

Open your medicine cabinet and your first-aid kit and take a look:

- Baby aspirin
- Children’s cough syrup
- Band-Aids
- Cold and chest relief
- Antibiotic ointment and first aid creams
- Anti-flu medication
- Pain relievers
- Cough drops
- Throat lozenges
- Antacids
- Sinus medications
- Allergy medications
- Nasal sprays
- Smoking cessation aids
- First Aid creams
- Pedialyte
- Calamine lotion
- Sleep aids
- Motion sickness pills
- Contact lens solution

ObamaCare makes these and additional over the counter medications and health care items taxable withdrawals from an HSA, HRA, and FSA beginning January 1, 2011.

According to AHIP, 8 million Americans used HSAs for routine medical care in 2008 (the most recent date for data). The IRS doesn’t count the number of families who use FSAs, but health care experts estimate that 30 million Americans use FSAs to pay for their family’s medical care.


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