(MARKETWATCH) Here’s something your orthodontist is not smiling about: a new tax rule raised the cost of braces this year.
Thanks to a change from the Affordable Care Act that places an annual $2,500 contribution cap on flexible spending accounts, which let workers set aside pre-tax dollars to cover medical expenses, some consumers may be spending more on braces, expensive eyewear and other medical supplies they would typically buy with the accounts.
Before the new rule, there was no official cap on how much taxpayers could stash into the account, though many companies typically set their own limits of $5,000. For a person in the 25 percent tax bracket, the cap cuts the maximum tax break in half to $625 from $1,250.
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