Does the Net Investment Income Tax Apply to You?

The Net Investment Income Tax is something that may come into play if you receive income from investments. This generally includes any interest payments, dividends, capital gains, rental income, royalties, and non-qualified annuities. Should you be required to pay this tax, you will be expected to submit 3.8% of the lesser of either your net investment income or the difference between your modified adjusted gross income and the threshold listed for your filing status.

Whether or not the Net Investment Income Tax applies to you depends on your filing status and your total income for the past year. To determine whether or not you will be expected to pay this tax, find your status on the following list and compare your income to the appropriate threshold; if your modified adjusted gross income is greater than the threshold, you may be expected to pay:

  • Single or Head of Household: $200,000
  • Married Filing Jointly: $250,000
  • Married Filing Separately: $125,000
  • Qualifying Widow or Widower with a Child: $250,000

To report this tax, you must file Form 8960 with your tax return. Should you require any further information or assistance on your taxes, please contact Seattle CPA Alisa Na during normal business hours.