New 3.8% Medicare contribution tax – Do you know how to reduce or eliminate your liability?

Description

Abstract: One of the funding mechanisms for health care reform is a new 3.8% Medicare contribution tax on net investment income (NII) going into effect this year. The tax applies to higher-income individuals as well as to trusts and estates. This article describes who is subject to the tax and suggests strategies to soften the blow. A sidebar explains what does and does not constitute net investment income.