New Income Tax Surcharge to hit in 2013

A new tax 3.8% income tax surcharge will become effective on taxable years beginning on and after January 1, 2013. These new surcharges have been put into place to help finance the recent healthcare reform.

This surtax will apply an annual 3.8 percent tax to the net investment income of individual taxpayers, including distributions of net investment income from trusts and estates. The surtax will generally be paid by taxpayers on net investment income when the taxpayer’s modified adjusted gross income exceeds the established thresholds, which are $125,000 for married person filing separate, $200,000 for an individual or $250,000 for a married couple filing jointly.

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