The proposed regulations would cause them to pay Medicare tax on phantom unearned income.
FORBES: IRS Should Fix Net Investment Tax Proposed Regulations
Individuals liable for Additional Medicare Tax will calculate the liability on their Form 1040.
Realized gains will also be subject to the 3.8% Medicare tax depending on income.
Remember, the income ceiling for the Medicare tax was once the same as for Social Security.
The new health reform law will raise that Medicare tax to 3.8 percent starting in 2013.
FORBES: U.S. To Hit Traders, Money Managers With A Tax Shot To The Gut
For nearly three years Republicans have accused Democrats of double counting the new Medicare tax.
This will avoid higher capital gains tax and the Medicare tax on unearned income starting next year.
Interest from tax-exempt bonds will remain free of federal taxes and the Medicare tax on unearned income.
The ObamaCare 3.8% Medicare tax on unearned income starts January 1, 2013, too (read my blog).
FORBES: Barack Obama Wants Take Your Money As We Tumble From The Fiscal Cliff
Throw in a 2.9% Medicare tax and the highest rate for this year climbs to almost 38%.
FORBES: Silicon Valley Employers Go Wild With Lavish Employee Benefits
Contributions for Medicare remain the same and there is no cap (all wages are taxable for Medicare tax purposes).
The last reason to avoid a Medicare tax increase: our entitlement programs are already heavily financed by the rich.
Dividends will also be subject to the 3.8% Medicare tax depending on income.
Yet capital gains incur an additional 3.8% Medicare tax starting January 1, 2013.
In addition, investors with higher income will be subject to a 3.8% Medicare tax on capital gains and dividend income.
FORBES: The Case For Higher Stock Prices After Tax Increases
For family employees under the age of 18, neither the employee nor the employer owes Social Security and Medicare tax.
Returning to the Medicare tax, high-income workers will pay the new tax, which will be deposited into the Medicare Trust Fund.
Medicare tax, which is currently applied only on wages, would be extended to certain passive investments for high income taxpayers.
FORBES: Did The Debates Offer Enough 'Hope and Change' for the Obama/Biden Ticket?
That would include the 3.8% Medicare tax on investment income of high income taxpayers scheduled to take effect in 2013.
The new taxes imposed by the 2010 healthcare legislation will add 0.9 percentage points to the current 2.9 percent Medicare tax.
FORBES: Marginal Tax Rates Matter More Than Average Tax Rates
Employees are currently subject to a 1.45% Medicare tax on their wages.
Starting on January 1, high income taxpayers will have an additional 90 basis point Medicare tax on wages that exceed a certain limit.
Finally, half the medicare tax is deductible against adjusted gross income in computing regular income tax, while none of the NIIT is deductible.
FORBES: Newt Gingrich May Beat The Obamacare 3.8% Tax - Can You ?
They will pay an additional 0.9% in Medicare tax, and a proposed (additional) 3.8% tax on unearned income (including interest, dividends and capital gains).
The Medicare tax will apply as enacted and should not be affected by whether the 15% dividend rate is extended or increased up to 39.6%.
The medicare tax is 2.9% (equally split between employer and employee in the case of wages) although it goes to 3.8% after crossing a threshold.
FORBES: Newt Gingrich May Beat The Obamacare 3.8% Tax - Can You ?
Even the 0.9% Medicare tax could put you in penalty territory.
FORBES: Why High Income Earners Need To Pay Extra Attention To 2013 Estimated Tax Payments
Then, beginning in 2013, high-income folks will pay an additional 3.8% Medicare tax on investment income, including capital gains, bringing the federal capital gains tax bite up to 23.8%.
This would raise the top marginal federal tax rate back to roughly 47% or 48%, if you include the Medicare tax and the phase-out of certain deductions and exemptions.
WSJ: A Reckless Congress: Health-care bill to impose new taxes, welfare state
What Democrats did was to effectively force Americans to pay the new Medicare tax twice: The wealthy pay it now and everyone will pay some portion of it later.
应用推荐