You may find a little less in your tax refund this year if you are subject to the new 3.8% net investment income tax that went into effect at the beginning of 2013. It applies to married couples filing jointly with modified adjusted gross income (MAGI) over $250,000 and single people with MAGI above $200,000 (trusts and estates are also affected). It kicks in if you have net investment income, which includes interest, dividends, capital gains and rental and royalty income, among other items.
If this income raised your tax bite for 2013, then it’s not too late to begin planning strategies to minimize this and other taxes for 2014. Be sure to contact us to talk about your best tax and financial planning options for the coming year.