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Here are five common examples of income that’s excluded: Wages. Unemployment compensation. ... Individuals, estates and trusts must pay a 3.8% net investment income tax (NIIT) when their NII ...
What is the net investment income tax? NIIT is a tax on net investment income. ... So they will be subject to the 3.8 percent NIIT on the $100,000, as it is the lesser of the two numbers. Kelly ...
An exemption certificate number is required in some cases for obtaining an exemption on a tax return. In 2014 the payment amount was 1% of income or $95 per adult ($47.50 per child) limited to a family maximum of $285 (national average premium for a bronze plan), whichever is greater. [4]
Double taxation is when a tax is paid twice on the same income or item. Indirect tax is a tax collected by an intermediary (such as a store) on behalf of the person who actually is required to pay (such as a customer) Lump-sum tax is a tax that is a set amount, regardless of a person's wealth or an item's value.
Real estate professionals may also be able to avoid the net investment income tax of 3.8 percent. Taxes on royalties Royalties are income from things like copyrights, patents, oil, gas and minerals.
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.
Regulated investment companies (mutual funds) and Real Estate Investment Trusts 861–865: Source of income (for international tax) 871–898: Tax on foreign persons/corporations; inbound international rules 901–908: Foreign tax credit 911–943: Exclusions of foreign income (mostly repealed) 951–965
Long-term capital gains tax rates are often lower than ordinary income tax rates. Capital gains are taxed at rates of zero, 15 and 20 percent, depending on the investor’s total taxable income.