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This is an additional 3.8% tax (separate from the 0.9% additional Medicare tax that applies to high-wage earners and federal capital gains tax) on income earned through interest, capital gains ...
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.
Medicare. News. Shopping. Main Menu. News. ... the net investment income tax, which is a 3.8% tax on interest, dividends, capital gains, and more. These are the 2023 income thresholds for net ...
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 ...
From 1998 through 2017, tax law keyed the tax rate for long-term capital gains to the taxpayer's tax bracket for ordinary income, and set forth a lower rate for the capital gains. (Short-term capital gains have been taxed at the same rate as ordinary income for this entire period.) [ 16 ] This approach was dropped by the Tax Cuts and Jobs Act ...
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.
After all gains and losses are calculated for the year, their net investment income comes out to $100,000. So they will be subject to the 3.8 percent NIIT on the $100,000, as it is the lesser of ...
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.