Are your investments subject to the 3.8% Net Investment Tax? It targets things like vacation homes and investment properties owned by high income individuals who exceed the threshold.
This law requires a tax of 3.8% on the lesser of either your net investment income or the amount by which your modified adjusted gross income (MAGI) exceeds a certain threshold.
- Filing Single/Head of Household — MAGI Threshold: $200,000
- Filing Married, Filing Jointly — MAGI Threshold: $250,000
- Filing Married, Filing Separately — MAGI Threshold $125,000
Here’s a few examples of what is generally included:
- Interest
- Dividends
- Capital gains
- Rental and Royalty Income
- Non-Qualified Annuities
Please make sure to consult your personal CPA with question on the Net Investment Tax and how it pertains to you. But always BE TAX ADVANTAGEOUS!
Source: American’s Tax Solutions / www.irs.gov
