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At what rate is the Medicare sewer tax on net investment income imposed

At what rate is the Medicare sewer tax on net investment income imposed
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Answer #1

In the past, taxpayers weren't required to pay Medicare tax on income generated from investments such as capital gains, dividends, and taxable interest. Since 2013, however, you could owe a 3.8% Medicare tax on some or all of your net investment income (as part of the Patient Protection and Affordable Care Act of 2010).

The amount you owe is based on the lesser of your total net investment income or the amount of your modified adjusted gross income (MAGI) that exceeds $200,000 for individuals, $250,000 for couples filing jointly, or $125,000 for spouses filing separately.

In other words, you owe the 3.8% tax on the amount by which your investment income exceeds the income thresholds, or, if your wages alone already are higher than the income thresholds, you'll owe tax on the lesser of net investment income or MAGI that exceeds the thresholds.

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