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Author: arrete Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 757465  
Subject: 3.8% tax on investment income Date: 11/10/2012 11:27 AM
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Another tax from Obamacare.

So what do you all know about it? A friend was asking, and DH came up with over 250K married or 200K single. Why do you always get dinged if you are married? And that's all I know about it. I bet you all have discussed it, but I don't remember where. Maybe 2828 has the info in one of his saved files that he uses to trot out to show that the Paers are wrong. Not that they care about facts.

arrete
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Author: JediGALT Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 654352 of 757465
Subject: Re: 3.8% tax on investment income Date: 11/10/2012 12:01 PM
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Marriage and kids is a tradition, a building block of western civilization, of Norman Rockwell's America. And while nothing is perfect, this way of life is more prone to yielding better prosperity, better education, better discipline, better everything.

If you're a Leftist and want to take the nation down, you don't attack the heart, you attack the blood that supplies the heart.

Government shall be the family that more and more people depend on.

JediG

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 654782 of 757465
Subject: Re: 3.8% tax on investment income Date: 11/12/2012 1:18 PM
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So what do you all know about it?

Not a lot to know. It's not technically called a surtax, but that seems to me the clearest way of talking about it. It applies to net investment income in excess of the amounts you mentioned effective 2013. It will be calculated on the 1040.

The other scheduled Obamacare tax law changes effective 2013:

A .9% Medicare surtax on wages over $250K joint, $200K other. Employers will withhold if they alone pay above the $200K threshold regardless of marital status shown on W-4. It will be calculated on the 1040.

A rise to 10% (from 7.5%) of AGI exclusion on deductible medical expenses.

As for "why married couples?" beats me. I long ago gave up trying to make sense of what Congress does.

Phil
Rule Your Retirement Home Fool

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Author: arrete Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 654784 of 757465
Subject: Re: 3.8% tax on investment income Date: 11/12/2012 1:30 PM
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Not a lot to know. It's not technically called a surtax, but that seems to me the clearest way of talking about it. It applies to net investment income in excess of the amounts you mentioned effective 2013. It will be calculated on the 1040.

The other scheduled Obamacare tax law changes effective 2013:

A .9% Medicare surtax on wages over $250K joint, $200K other. Employers will withhold if they alone pay above the $200K threshold regardless of marital status shown on W-4. It will be calculated on the 1040.

A rise to 10% (from 7.5%) of AGI exclusion on deductible medical expenses.

As for "why married couples?" beats me. I long ago gave up trying to make sense of what Congress does.

Phil
Rule Your Retirement Home Fool
--------

Thanks. Didn't know about the change in deductible medical expenses. I'm just starting to keep track of that.

arrete

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Author: TerryMcK Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 654810 of 757465
Subject: Re: 3.8% tax on investment income Date: 11/12/2012 3:45 PM
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Didn't know about the change in deductible medical expenses. I'm just starting to keep track of that

That is the strangest one of all. In a bill that is touted to provide more medical coverage, reduce expenses, etc. they are going to punish people who have high medical bills by raising the bar to claim medical expenses from 7.5% to 10% of AGI. Another fine example of not reading the bill.

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Author: CCinOC Big funky green star, 20000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 654849 of 757465
Subject: Re: 3.8% tax on investment income Date: 11/12/2012 6:51 PM
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arrete wrote: A friend was asking, and DH came up with over 250K married or 200K single. Why do you always get dinged if you are married?

The way I interpret it is, married taxpayers get a break. If they were filing singly, they'd be taxed at $200K each, right?

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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 654857 of 757465
Subject: Re: 3.8% tax on investment income Date: 11/12/2012 7:37 PM
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arrete wrote: A friend was asking, and DH came up with over 250K married or 200K single. Why do you always get dinged if you are married?

The way I interpret it is, married taxpayers get a break. If they were filing singly, they'd be taxed at $200K each, right?


If they are married on Dec 31, the tax kicks in at a total household income of $250K.

If they get divorced on Dec 30, the threshold on total household income potentially jumps as high as $400K.

That's (up to) $150K additional income that is taxed at the lower rate rather than the higher rate.

That could potentially be enough of a tax difference to pay for a nice wedding and honeymoon the first weekend in January.

(Years ago I heard of couples doing exactly that, to dodge the marriage penalty. Get divorced in late December and remarried in early January, every year.)

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Author: arrete Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 654878 of 757465
Subject: Re: 3.8% tax on investment income Date: 11/12/2012 9:55 PM
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The way I interpret it is, married taxpayers get a break. If they were filing singly, they'd be taxed at $200K each, right?
-------------

You have a point, cc. Makes sense.


arrete

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Author: arrete Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 654880 of 757465
Subject: Re: 3.8% tax on investment income Date: 11/12/2012 10:20 PM
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(Years ago I heard of couples doing exactly that, to dodge the marriage penalty. Get divorced in late December and remarried in early January, every year.)
---------------

I've known people that have done that.

arrete

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