Healthcare

Does the the Affordable Care Act (ACA) add taxes for higher income individuals?

Does the the Affordable Care Act (ACA) add taxes for higher income individuals?

In response your question, yes, the Affordable Care Act (ACA) did add taxes for higher income individuals.  The two most notable being:

Additional Hospital Insurance Tax – which increased theHospital Insurance (HI) (aka Medicare) tax rate (currently at 1.45%) by 0.9 percentage points on individual taxpayer earnings (wage withholding and SE tax) in excess $200,000 for single taxpayers and $250,000 for married taxpayers filing jointly.

Net Investment Income Tax– the ACA also imposed a new tax of 3.8% tax on the lesser of a taxpayer's net investment income, or the excess of the taxpayers modified AGI over $200,000 for single taxpayers and $250,000 for married taxpayers filing jointly. Investment income generally includes interest, dividends, capital gains and income and capital gains from passive activities.  

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Lee Reams, BSME, EA

Lee Reams, BSME, EA

Editor-in-Chief

Besides his role at CountingWorks as an educator and speaker to thousands of accountants nationwide, Lee manages a technical research service for a large group of tax accountants which sharpens his technical skills. Lee served on the Board of Blackline Systems, is a former Board of Director for the California Tax Education Council, is a Past President of the San Fernando Valley Chapter of Enrolled Agents, Member and Past Director for the California Society of Enrolled Agents.

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