Here is a quick summary of two new tax hikes and how they could affect you. January 1, 2013 a new 3.8 % Medicare tax went into effect that will apply to Adjusted Gross Income (AGI) and Investment Income. This tax applies to the net investment income of individuals whose AGI is above $200,000 or for couples filing jointly with an AGI above $250,000.
The AGI is the figure found on the bottom of the front page of IRS form 1040. Types of income included in this figure are interest, dividends, rents (less expenses), capital gains (less capital losses), wages, retirement income and income from partnerships and small businesses.
NAR (National Association of Realtors) released an article that breaks down how
this tax affects investments and gives specific scenarios, i.e. the sale of a primary residence, and how the tax applies. You can this access this article through Realtor.org by clicking here.
California’s Prop 30 is a new tax that retroactively increases income tax by applying to income earned since January 1, 2012. Along with affecting earners of more than $250,000 for the next seven years, Prop 30 also increases sales tax .25 cent for the next four years raising San Diego’s to 8%. For a breakdown of how Prop 30 applies to specific income brackets click here.