New Affordable Care Act tax hike for high earners kicks in with the new year

With or without going over the fiscal cliff curb, high earners are going to see a little bit more taken out of their paychecks beginning Jan. 1 to help pay for the Affordable Care Act.

Currently, wage earners pay a Medicare tax of 1.45%, which is automatically taken out of their paychecks. Employers pay a matching 1.45% rate. Those taxes won't change.

But come Jan. 1, individuals earning more than $200,000 in wages and married couples with wages of more than $250,000 will pay an additional payroll tax of 0.9% for Medicare on income that exceeds those amounts.

Employers will be able to deduct the extra 0.9% tax for individual employees on the portion of income that exceeds $200,000, but they won't be allowed to withhold additional payroll taxes to account for a combined income.

That means that couples filing jointly who make more than $250,000 combined will have to pay that additional 0.9 percent, because it won't be automatically withheld. Other new fees/taxes kicking in are a new tax deduction cap of $2,500 on flexible spending accounts, and for medical-device manufacturers, a 2.3 percent tax on products. All this is in preparation for 2014, when the health insurance exchanges are open for business and subsidies begin.