TMTW 104 – Planning for 2013 Investment Taxes

Tax and Money Tip of the Week
Planning for 2013 Investment Taxes
August 8th, 2012 | No. 104

As we get closer to 2013, it may be time to begin planning for some of the taxes that are part of the Patient Protection and Affordable Care Act of 2010 that go into effect next year.
One of these is the “surtax” of 3.8% on net investment income, which includes income from Interest, Dividends, Annuities, Royalties, Rents and net Capital Gains from Disposition of Property (unless used in Non-Passive Trade or Business).
This surtax applies to taxpayers whose Modified Adjusted Gross Income (MAGI) is in excess of $200,000 ($250,000 for married filing jointly). MAGI includes earned income and investment income as well as taxable distributions from pension plans and IRAs (including Required Minimum Distributions). If your MAGI is greater than these thresholds, the surtax of 3.8% would be applied to the lesser of your net investment income or the amount the threshold.
In addition to the surtax on net investment income, there is also a new 0.9% tax on earned income in excess of $200,000 ($250,000 for married filing jointly) AND the tax on long-term capital gains is scheduled to increase from 15% to 20% for 2013.
What can you do to minimize the effect of these taxes on you? Now is an excellent time to contact us to begin planning the steps you can take to minimize your tax bite and save you money.

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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