Here is how the tax works. WSJ Tax Guide 2019: Taxes on Investment Income The overhaul made few changes to investment-income taxes, preserving the favorable rates for capital gains and dividends. The net investment income tax, or NIIT, is an IRS tax related to the net investment income of certain individuals, estates and trusts. This name was born from the use of the phrase “net investment income… That’s a name made up by the tax industry for the Section 1411 Unearned Income Medicare Contribution. We estimate a “static” revenue loss from repeal at $628 billion over ten years, assuming no gain in GDP from the lower tax … For tax years beginning after Dec. 20, 2019, all private foundations subject to the Section 4940 excise tax on net investment income will calculate the tax … There is a flat surtax of 3.8% on net investment income for married couples who earn more than $250,000 of adjusted gross income (AGI). An additional 3.8% tax on “Net Investment Income” (i.e., interest, dividends, royalties, etc.) Effective for taxable years beginning after December 20, 2019, a new single-tier excise tax of 1.39 percent of net investment income replaces the existing two-tier structure, which imposed a 2 percent tax on net investment income … Another example of the marriage penalty at work in our tax code. The high tax rate on individual saving retards capital formation, which depresses productivity and wages. T20-0165 - Distributional Impacts of Repealing Net Investment Income Tax (NIIT) Enacted by the Affordable Care Act (ACA), by Expanded Cash Income Level, 2019 Distribution by expanded cash income level of the imapcts of repealing the Affordable Care Act's 3.8% net investment income tax … for taxpayers with modified adjusted gross income in excess of $200,000/single or $250,000/married … For single filers, the threshold is just $200,000. … The NIIT is set at 3.8%, and that rate is relevant for both the 2018 and 2019 tax … Effective for tax years beginning after Dec. 20, 2019, Section 4940(a) was amended to provide a single tax rate of 1.39% on net investment income and Section 4940(e) was repealed. The Net Investment Income Tax is a bad tax, and its repeal will benefit everyone. How the Obamacare Medicare Tax works. The net investment income tax applies to (1) estates and trusts that have undistributed net investment income and adjusted gross income above $12,400 for 2016 (and a similar inflation … A flat surtax of 3.8% applies to net investment income of most married couples who have more than $250,000 of adjusted gross income (AGI). The levy is only investment income … On average, repealing the ACA would cut taxes for the top 1 percent by about $32,000 in 2019 (or 1.9 percent of after-tax income) and by about $200,000 (or 2.5 percent of after-tax income) … Here’s something even more interesting: there’s no such thing as the Net Investment Income Tax (NIIT).
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