Will
you be subject to the 3.8% surtax in 2013. You now have less than 60 days to
take action to prevent this from happening. Here are two examples of the new
3.8% surtax set to take effect January 1, 2013:
Example #1:
Alan and Beth Carter have a MAGI of
$300,000 in 2013 and file a joint return.
Their net investment income is $20,000.
Their MAGI threshold is $250,000.
Therefore, the Carters are $50,000 over that amount. However, their $20,000 of investment income
is smaller than their $50,000 of excess MAGI.
As a result, the 3.8% surtax will be imposed on $20,000 – the lesser
number of the two amounts – and the Carters will owe a $760 surtax.
Example # 2:
Now let’s look at another couple, Dan
and Eve Franklin. They also have $300,000
of MAGI, but the Franklins’ income in 2013 includes $52,000 of net investment
income.
Now, the Franklins’ $52,000 of net
investment income exceeds the $50,000 amount that they are over the $250,000
joint filer threshold. For the
Franklins, $50,000 is the lesser number, so their surtax obligation is 3.8% of
the $50,000 excess MAGI or $1900.
Have a Trust, then your MAGI is $12,000.
Remember,
this Surtax is here to stay, you now have less than 60 days left to take
action. We have plans available to help,
is there a one-step plan for everyone, no, each individual situation is
different with different fixes for different situations. Give the office a call to schedule a meeting
today.
