[manaboutown]

Reviewing my tax returns over the past several years I found this insidious component seems to grow larger every year. What I found especially nettlesome is it applies to LTCGs!

It was initiated in 2013. That year 3.1M taxpayers paid it. In 2021 7.3M were hit with it so more and more of us now pay it.

It seems only a few steps may be taken to alleviate its impact.

Net Investment Income Tax: Do You Have to Pay It? - NerdWallet

What Is The Net Investment Income Tax And Who Has To Pay It? | Bankrate

Net Investment Income Tax (NIIT): What Is It and Who Pays? | Kiplinger

[Pballer]

Originally Posted by manaboutown

Reviewing my tax returns over the past several years I found this insidious component seems to grow larger every year. What I found especially nettlesome is it applies to LTCGs!

It was initiated in 2013. That year 3.1M taxpayers paid it. In 2021 7.3M were hit with it so more and more of us now pay it.

It seems only a few steps may be taken to alleviate its impact.

Net Investment Income Tax: Do You Have to Pay It? - NerdWallet

What Is The Net Investment Income Tax And Who Has To Pay It? | Bankrate

Net Investment Income Tax (NIIT): What Is It and Who Pays? | Kiplinger

It would have been nice if they had at least indexed the threshold to inflation. Also, big marriage penalty seems very unfair - threshold of $200,000 for singles, but only $250,000 for married couples. If they get rid of the Affordable Care Act this may very well go away.

[manaboutown]

One thing I have done is move some of my liquid funds (cash) into an AMT-free municipal money market fund, SWWXX. Not much more I can do. It is more a protest statement than financially meaningful

[Pugchief]

Originally Posted by manaboutown

Reviewing my tax returns over the past several years I found this insidious component seems to grow larger every year. What I found especially nettlesome is it applies to LTCGs!

First world problems. It's basically a "tax the rich" penalty.

If you're unhappy now, wait until they tax your UNREALIZED capital gains.

[Pugchief]

Originally Posted by Pballer

It would have been nice if they had at least indexed the threshold to inflation.

Hahaha, that was by design. First it only gets high income folks. Later it gets the middle class.

Originally Posted by Pballer

If they get rid of the Affordable Care Act this may very well go away.

The ACA isn't going anywhere. No one has a better alternative. Aside from eliminating pre-existing conditions, most of the ACA has been a disaster. High costs, ridiculous mandates, EMR, etc

[Hape2Bhr]

Originally Posted by Pugchief

First world problems. It's basically a "tax the rich" penalty.

If you're unhappy now, wait until they tax your UNREALIZED capital gains.

Golly gee. Who would even think of doing such a thing!

[manaboutown]

NIIT, AMT and IRMAA are all outrageous confiscatory taxes.

[Pballer]

Seeing as social security benefits will soon be exempt from all federal taxation for everyone, that will help to stay under the niit income threshold.

[retiredguy123]

Originally Posted by Pballer

Seeing as social security benefits will soon be exempt from all federal taxation for everyone, that will help to stay under the niit income threshold.

I'll bet you a dollar that there will be an income limit to qualify for tax free Social Security benefits.

[Byte1]

Originally Posted by retiredguy123

I'll bet you a dollar that there will be an income limit to qualify for tax free Social Security benefits.

You mean, like NOW?

[Pugchief]

Originally Posted by Pugchief

If you're unhappy now, wait until they tax your UNREALIZED capital gains.

Thankfully, the wait time just got extended.

[Pballer]

Originally Posted by retiredguy123

I'll bet you a dollar that there will be an income limit to qualify for tax free Social Security benefits.

I didn't hear anything in the campaign about an income limit.

[CoachKandSportsguy]

Campaign talk and congressional action on that talk has very little follow through historically. Don't hold your breath

[nn0wheremann]

Originally Posted by manaboutown

Reviewing my tax returns over the past several years I found this insidious component seems to grow larger every year. What I found especially nettlesome is it applies to LTCGs!

It was initiated in 2013. That year 3.1M taxpayers paid it. In 2021 7.3M were hit with it so more and more of us now pay it.

It seems only a few steps may be taken to alleviate its impact.

Net Investment Income Tax: Do You Have to Pay It? - NerdWallet

What Is The Net Investment Income Tax And Who Has To Pay It? | Bankrate

Net Investment Income Tax (NIIT): What Is It and Who Pays? | Kiplinger

Oh, the awesome burdens of the upper crust!

[DAVES]

Originally Posted by manaboutown

One thing I have done is move some of my liquid funds (cash) into an AMT-free municipal money market fund, SWWXX. Not much more I can do. It is more a protest statement than financially meaningful

We are now faced with RMD required minimum withdrawals from IRAs. Yes, I am aware of Roth conversions. We were in New York and it would have been subject to 6% state tax and 3% city tax. In any case I did not do it. IRA withdrawals are subject to your highest tax rate no long term gains etc. Be sure to check. I'm not a tax expert. You need to not touch the money or it is taxable. You can donate the money to a 5013c charity and no tax is due.