How to Determine if the Net Investment Income Tax Applies to You

If you have income from investments, you may be subject to the Net Investment Income Tax.  You may owe this tax if you receive investment income and your income for the year is more than certain limits.

The law requires a tax of 3.8 percent on the lesser of either your net investment income or the amount by which your modified adjusted gross income exceeds a threshold amount based on your filing status.

Net Investment Income.  This amount generally includes income such as: Interest, Dividends, Capital gains, Rental and royalty income and Non-qualified annuities.

 

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