New Taxes for 2013: Investment Income Tax and Add'l Medicare Tax

Net Investment Income Tax 

A new Net Investment Income Tax goes into effect starting in 2013. 

The 3.8 percent Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts.

Additional Medicare Tax 

A new Additional Medicare Tax goes into effect starting in 2013. 

The 0.9 percent Additional Medicare Tax applies to an individual’s wages, Railroad Retirement Tax Act compensation, and self-employment income that exceeds a threshold amount based on the individual’s filing status.

The threshold amounts are:
• $250,000 for married taxpayers who file jointly, 
• $125,000 for married taxpayers who file separately, and 
• $200,000 for all other taxpayers.

An employer is responsible for withholding the Additional Medicare Tax from wages or compensation it pays to an employee in excess of $200,000 in a calendar year.