Bob Keebler, the well known CPA, recently posted about the new 3.8% Medicare tax. Rather than getting your tax news from Facebook or while standing by the water cooler at work how about letting me give you the basics about this hotly discussed tax.
“For tax years beginning after 2012, new Internal Revenue Code (IRC) section 1411 imposes a 3.8 percent surtax on certain passive investment income of individuals and of trusts and estates based on a mathematical formula. For taxpayers to be able to plan around the tax they must first understand what income it applies to and how the tax is calculated.”
The applicable threshold amounts for individuals vary depending on filing status and are shown below:
Here are the thresholds before which you need not worry about it:
Married Taxpayers, Filing Jointly $250,000
Married Taxpayers, Filing Separately $125,000
All other individual taxpayers $200,000
For more information you should visit Bob’s website.