There is one more important thing about yesterday’s Supreme Court ruling upholding the Patient Protection and Affordable Care Act and that is a new investment tax. There is a new 3.8% surcharge on investment income in excess of $250,000 (married couple). It will go into effect on January 1, 2013.
If you have Adjusted Gross Income in excess of $250,000 from the following sources, you are subject to the tax. According the the WSJ it includes:
Absent guidance from the IRS, experts believe the tax appears to apply to dividends; rents; royalties; interest, except municipal-bond interest; short- and long-term capital gains; the taxable portion of annuity payments; income from the sale of a principal home above the $250,000/$500,000 exclusion; a net gain from the sale of a second home; Schedule C income from businesses; and passive income from real estate and investments in which a taxpayer doesn’t materially participate, such as a partnership.
The tax doesn’t include payouts from a regular or Roth IRA, 401(k) plan or pension; Social Security income; or annuities that are part of a retirement plan. Also not included are life-insurance proceeds; municipal-bond interest; veterans’ benefits; or income from a business on which you are paying self-employment tax, such as a Subchapter S firm or a partnership.
Look for a lot of wrangling and political posturing about this.