• 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5

Paying the Obamacare tax

I'm not clear in understanding how and when the 3.8% Obamacare tax works, based on married couple filing jointly.

In retirement if I have ordinary income, comprised of IRA distributions, Social Security etc that exceed $250,000 and qualified dividends and capital gains in the range of $150,000 will I be subject to the Obamacare tax? I assume that at these levels my capital gains tax rate is only 15%. If I am subject to the 3.8% tax what would I have to do to avoid paying this tax?
I don't think there is an Obamacare tax per se as you state.  There was an increase to existing taxes for capital gains, investment income that are illustrated in my attached link.. 
It is a misnomer to refer to it as Obamacare tax.  I see Reagan signed to make the Social Security taxable for many, many participants.  I don't hear people referring to it as the Reagan Social Security Tax -even though it would be more relevant since it was a new tax that applies with greatest impact to the working and middle class vs high income as the ACA applies.
Here's the whole Affordable Care Act Tax package:
Whatever it is called, it is an additional tax. Total your income without the things to which it applies. If that income is over 250K, then the 3.8% applies to all of your "evil" income. If not, then whatever "evil" income can be added to your other income until the total is 250K will not have the 3.8% tax applied.

If you use any tax prep software, that will take care of it.

Forum Jump:

Users browsing this thread: 1 Guest(s)