Get IRS 8960 2017

When to file Form 8960 If it turns out that your net investment income is zero or less, you don't need to file the form with your taxes. ... You then enter your NIIT liability on the appropriate line of your tax form, and file Form 8960 with your return.

Form 8960 is the IRS document used to calculate your total Net Investment Income (NII) and determine how much of it may be subject to the 3.8% Medicare contribution tax. ... Your Modified Adjusted Gross Income (MAGI) is above the threshold outlined below.

Updated March 12, 2019. The net investment income tax is a 3.8 percent surtax on a portion of your modified adjusted gross income (MAGI) over certain thresholds. It hits high earners with significant investment income.

On form 8960, miscellaneous investment expenses on line 9c can be deducted only to the extent these items are deductible in Schedule A. As the new tax law has suspended the itemized miscellaneous deduction, these expenses are not deductible on form 8960 either.

Certain home sales are subject to the NIIT, however. For NIIT purposes, net investment income includes interest, dividends, annuities, rents and royalties, net capital gains, and other investment income, reduced by certain expenses that can be allocated to that income.

1. What is the Net Investment Income Tax (NIIT)? The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.

1. What is the Net Investment Income Tax (NIIT)? ... The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.

In general, net investment income includes, but is not limited to: interest, dividends, capital gains, rental and royalty income, and non-qualified annuities. Net investment income generally does not include wages, unemployment compensation, Social Security Benefits, alimony, and most self-employment income.

The net investment income tax is a 3.8 percent surtax on a portion of your modified adjusted gross income (MAGI) over certain thresholds. It hits high earners with significant investment income.

Operating income from a non-passive business Passive income such as interest and dividends can be subject to NIIT, even interest and dividend income derived from your business. However, if you materially participate in your business, you can eliminate passive income from the equation.

On form 8960, miscellaneous investment expenses on line 9c can be deducted only to the extent these items are deductible in Schedule A. As the new tax law has suspended the itemized miscellaneous deduction, these expenses are not deductible on form 8960 either.

Deduction Rules Like tax preparation fees, investment management fees and financial planning fees may be taken as a miscellaneous itemized deduction on your tax return, but only to the extent that they exceed 2 percent of your adjusted gross income (AGI).

When to file Form 8960 If your net investment income is $1 or more, Form 8960 helps you calculate the NIIT you owe by multiplying the amount by which your MAGI exceeds the applicable threshold or your net investment income whichever is the smaller figure by 3.8 percent.

Investment income such as interest and rent is considered ordinary income and will generally be taxed according to your ordinary income tax rate. ... Qualifying dividends are also taxed at long-term capital gains rates (dividends that don't qualify for long-term capital gains rates are taxed at ordinary income tax rates).

First, a 3.8% Medicare surtax is levied on the lesser of net investment income or the excess of modified adjusted gross income (MAGI) above $200,000 for individuals, $250,000 for couples filing jointly, and $125,000 for spouses filing separately.