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New Investment Income Surtax

Posted by Admin Posted on Feb 25 2013

Does the new investment income surtax apply to you?

As of January 1, there is a new 3.8% net investment income tax on some categories of passive investment income for individuals, trusts and estates that exceed certain income thresholds.  As a result, it is in your best interest to identify these income sources and adopt strategies to lower your modified adjusted gross income or your net investment income to avoid the surtax.  If you think the new tax may apply to you, we can explain your choices and help you pick the best strategy to help reduce your tax bill.

Some items that are considered to be investment income are:

  • Interest
  • Dividends
  • Short Term Capital Gains
  • Long Term Capital Gains
  • Royalty Income

Some items that are not considered to be investment income are:

  • Wages
  • Self employment income
  • Proceeds from Life Insurance
  • Social Security Benefits
  • Veterans Benefits
  • IRA and Roth Distributions

To learn more about our tax management services, or, tax tips for individuals please visit our website at