Are You Ready for the New Investment Tax?

Via the Wall Street Journal

It’s time to grapple with the new 3.8% tax on investment income.

The ordeal of 2012 taxes is barely over. But it isn’t too early to understand and cushion the blow of the investment-income levy, which Congress passed in 2010 to help fund the health-care overhaul.

The tax, which took effect Jan. 1, applies to the “net investment income” of married joint filers who have more than $250,000 of income (or $200,000 for singles). Only investment income—such as dividends, interest and capital gains—above the thresholds is taxed. The rate is a flat 3.8% in addition to other taxes owed.

Here are steps to consider.

  • Minimize your adjusted gross income
  • Rearrange your assets
  • Time income if possible
  • Harvest losses
  • Consider Roth IRA conversions
  • Go offshore

There are other suggestions.  For details go here.

Tagged ,
%d bloggers like this: