If your income hits a certain level, you may face an additional wrinkle in calculating your taxes: the net investment income tax (also referred to as the unearned income Medicare contribution tax). This 3.8% Medicare tax applies to some or all of your net investment income if your modified adjusted gross income (MAGI) exceeds certain […]
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Minimizing Estate Taxes
The act of giving away your property, either during life or at death, will probably be subject to one or more of several types of taxes (collectively referred to here as estate taxes), either on the federal level, state level, or both. These tax liabilities may be the largest potential expenses you or your estate […]
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How Medicare-Related Taxes Affect High-Income Individuals
The health-care reform legislation enacted in 2010 included Medicare-related taxes that first took effect in 2013. These taxes target high-income individuals and families. Here are the basics: ADDITIONAL MEDICARE PAYROLL TAX If you receive a paycheck, you probably have some familiarity with the Federal Insurance Contributions Act (FICA) employment tax; at the very least, you’ve […]
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Choosing an Income Tax Filing Status
Selecting a filing status is one of the first decisions you’ll make when you fill out your federal income tax return, so it’s important to know the rules. And because you may have more than one option, you need to know the advantages and disadvantages of each. Making the right decision about your filing status […]
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Tax Planning Tips: Disability Insurance
The income you receive from disability income insurance may or may not be taxable. The taxability of disability income insurance benefits depends on what type of benefits you receive, whether the premiums were paid with pretax or after-tax dollars, and who paid the premiums (you or your employer). INDIVIDUAL DISABILITY INCOME INSURANCE The rules surrounding taxation […]
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Capital Gains Tax
What is capital gains tax? Capital gains tax is imposed on gains realized from the sale of capital assets such as a home, an investment, or a business interest. Special maximum tax rates generally apply to long-term capital gains; these rates are typically lower than the rates that apply to ordinary income. These special maximum […]