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US Taxpayers Brace for New Investment Tax

Tax increases on investments embedded in President Barack Obama’s healthcare law will kick in early 2013.
Now that the Supreme Court has cleared up doubts as to whether the law violates the Constitution — it doesn’t on the grounds that it’s a legal tax — tax rates on capital gains and dividends will jump from their current 15 percent level to 18.8 percent to help fund overhaul of the healthcare sector, the Wall Street Journal reports.
The law affects joint filers with adjusted gross income of more than $250,000 and $200,000 for single filers.

The new levy is complex, but in effect it is a flat tax on investment income above the $250,000/$200,000 threshold. Note that while the tax applies only to investment income above the threshold, other income—such as wages or Social Security—can raise adjusted gross income, making investment income more vulnerable to the tax.

Continue reading on Wall Street Journal



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