• Under the 2010 Health Care Act, a 3.8% tax is imposed on “net investment income” beginning in 2013.  The tax is owed on income over $250,000 (married filing joint), $125,000 (married filing separate), or $200,000 (single/head of household).  Estates and Trusts will be subject to the tax if their undistributed Net Investment Income and adjusted gross income are over $11,950 (i.e., the highest trust tax bracket).
    Net investment income includes interest, dividends, passive rental income, gains on sales of investments, royalties, ordinary income that is passive in nature, etc.  It does not include, however, active trade or business income, tax-exempt interest, distributions from qualified plans, etc.
    If you are concerned about how this new tax may impact you, please give us a call to discuss ways in which we can minimize the impact of the tax.