Monthly Archives: March 2014

Net Investment Income Tax

Net Investment Income TaxStarting in 2013, individuals, estates and trusts may be subject to the Net Investment Income Tax (NIIT).  NIIT is surtax of 3.8% which is applied to the lesser of:

  • Modified Adjusted Gross Income (MAGI) above the threshold amount [Married filing jointly $250,000; Single/Head of Household $200,000; Married filing separately $125,000] or
  • Net Investment Income (NII).

The tax planning and compliance issues surrounding the NIIT are very complex.  The IRS has just recently updated its NIIT Frequently Asked Questions page.  It can be found at: Continue reading Net Investment Income Tax

Are My Social Security Benefits Taxable?

Social SecurityToday many folks find themselves working into the Social Security years, whether by choice or necessity. Our Firm fields this question regularly. If Social Security was your only source of income in 2013, your benefits may not be taxable. You also may not need to file a federal income tax return. If you get income from other sources, then you may have to pay taxes on some of your benefits.

A quick and dirty rule of thumb is to add one-half of your Social Security benefits to all your other income, including any tax-exempt interest. Next, compare this total to the base amounts below. If your total is more than the base amount for your filing status, then some of your benefits may be taxable. The three base amounts are: Continue reading Are My Social Security Benefits Taxable?