Planning for net investment income taxes
Abstract: Individual taxpayers are potentially liable for NII taxes if their modified adjusted gross income exceeds $200,000 ($250,000 for joint filers and qualifying widows or widowers; $125,000 for married taxpayers filing separately). Generally, MAGI is the same as adjusted gross income. However, it may be higher if they have foreign earned income and certain foreign investments. This article explains how to calculate the tax and offers several planning strategies taxpayers can use to minimize a tax hit.