Tax Planning for the 3.8 Percent Medicare Tax: Tax Tip Number Four

Did you hear?  Your interest, dividends, and capital gains may be subject to yet to an additional tax next year.

To reiterate, the additional 3.8% tax on investment income, is coming next year, and it will affect individuals with modified adjusted gross income of $200,000 or more and married couples with at least $250,000.  This will result in paying 3.8% more in federal income tax on the lesser of your investment income or your “excess” MAGI- the amount that exceeds the $200,000 or $250,000 threshold.

Tax Tip Number Four: You might want to consider selling appreciated assets this year, instead of 2013.

On your principal residence, only gains that exceed the $250,000 exclusion for single individuals, or $500,000 for couples will be hit by the surtax if your AGI is high enough to trigger it.

On rental properties and second homes, selling in 2012 will preclude the potential surtax in 2013.

If you were contemplating selling a business, you may want to expedite that for 2012, rather than 2013, to avoid the potential surtax, if your income would exceed the above referenced thresholds and meet the criteria to trigger it.

Lefstein-Suchoff CPA & Associates, LLC, is here for all your tax planning & tax preparation needs.

Check us out at  201-947-8081 or 646-688-2807.


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