Finance & Enjoyment Blog

In 2013, a new tax will take effect that will apply to all upper-income earners on their investment income. The source of this new tax is a surcharge to provide an additional revenue stream for Medicare and will charge 3.8% on the lesser of taxpayer’s investment income or total adjusted gross income above $250,000 for married individuals and $200,000 for singles. In other words, if you’re married and have $50,000 in investment income (dividends, capital gains, etc) while your total income for the year is $270,000, then you’ll owe an extra $760 in taxes [(270,000-250,000) x 3.8%]. However, there are ways to be proactive for this tax: 1.It may be worth it to sell highly appreciated investments in 2012 to avoid the extra surcharge. 2.If you are thinking about selling your principal residence, any gain probably will not trigger the surcharge unless the gain is over $250,000 for singles and $500,000 for married. 3.Rental properties however are a different matter. Any gain or loss from a rental property will be fully taxable and incur the surcharge so selling it in 2012 is preferable to selling it in 2011. 4.If you’re planning on converting your IRA into a Roth account, note that this conversion will raise your adjusted gross income making investment exclusion greater. If you have any questions or would like to learn more on how you can save on taxes in the future, please call us at (303) 815-1100 or email us at


Posted in Your Financial House » Retirement and Exit Strategies » Rules and Regulations »



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