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Higher income taxpayers, as well as taxpayers with sources of income that are defined as net investment income in the statute, pay an additional 3.8% tax to offset the costs of the Affordable Care Act. [9] This tax first took effect in 2013.
Had their net investment income been $300,000, then Kelly and John would pay 3.8 percent on the $250,000 by which their MAGI exceeds the income thresholds. Here, Kelly and John would pay $9,500 in ...
Taxpayers earning income above certain thresholds ($200,000 for singles and heads of household, $250,000 for married couples filing jointly and qualifying widowers with dependent children, and $125,000 for married couples filing separately) pay an additional 3.8% tax, known as the Affordable Care Act tax provisions#net investment income tax, on ...
Net investment income (NII) is defined as the profit gained from investments after deducting certain related expenses. This includes various forms of income such as interest, dividends, rental ...
These are the 2023 income thresholds for net investment income tax: Single-filers or head of household: $200,000. Qualifying widow(er) with a child: $250,000. Married couples filing jointly: $250,000.
Additional Medicare tax: High-income earners may also have to pay an additional 0.9% tax on wages, compensation, and self-employment income. [14] Net investment income tax: Net investment income is subject to an additional 3.8% tax for individuals with income in excess of certain thresholds.
Net investment income tax Finally, income from dividends, capital gains and other similar forms of income may face an additional surcharge of 3.8 percent, called the net investment income tax .
Short-term capital gains are subject to the same tax brackets as ordinary income but are also subject to the 3.8% net investment income tax. If the incentive stock option is sold above the strike price but below the exercise price in the same tax year, the income is recognized solely as ordinary income.