Putnam County Record

Beware the Nasty ‘Niit’ — Net Investment Income Tax

If you happen to have your adjusted gross income hit the threshold for this new tax (part of ACA), it may be time to see how you can restructure your investments and rental incomes to minimize the impact of this new tax. It is 3.8 percent of your net investment income above the threshold.

Now many taxpayers can say this doesn’t affect them because they are below the threshold, but will this always be the case? What may be surprising are some of the items that are included in net investment income, such as rents. Does anyone out there own farmland that they cash rent? Oh yeah, that is part of net investment income! It’s not just interest and dividends that are your investment income, but gains from the sale of assets (unless they were used as part of your business), and rental income.

At this point, the thresholds are high enough that most taxpayers are not affected, but it is something to be aware is out there, and discuss with your tax advisor if you are close to the threshold amounts.

Barb Chambers, CPA resides in McNabb. She can be reached at 815-882-2437 or 815-252-2427 or at Baccpa1@gmail.com.