Taxes on Investment Income and the 3.8% Tax Surcharge
Marginal Federal Income Taxes on Investment Income and the 3.8% Tax Surcharge: As a result of legislation regarding ObamaCare, Federal income taxes now include a 3.8% surcharge on investment income for couples who earn more than $250,000 total. Thus, at these income levels qualified dividends and long-term capital gains are not taxed simply at the preferred rates of 15%-20%. The worst past of the legislation is that the $250,000 threshold is not indexed to inflation – meaning that more and more taxpayers will be falling behind in real terms unless their income before taxes is increasing faster than inflation.
Biltmore Capital Advisors LLC is not a tax or accounting firm. Please consult your tax advisor to determine if these facts are relevant to your particular situation.