ACA’s NIIT and Medicare taxes pose planning challenges

Description

Abstract: Key provisions of the Affordable Care Act (ACA) have changed several times since late last year. But one important component of the law that hasn’t changed will affect many high-income earners. Two new taxes — the net investment income tax (NIIT) and the additional Medicare tax — apply to certain types of income for those whose income exceeds specified thresholds. This article describes the types of income subject to these taxes and the earnings thresholds that trigger them. It also lists several strategies that could help minimize the impact of these taxes.