{"id":372942,"date":"2021-11-26T22:10:00","date_gmt":"2021-11-26T19:10:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/retirement-weekly-is-niit-the-same-as-the-millionaire-tax\/"},"modified":"2021-11-26T22:10:00","modified_gmt":"2021-11-26T19:10:00","slug":"retirement-weekly-is-niit-the-same-as-the-millionaire-tax","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/retirement-weekly-is-niit-the-same-as-the-millionaire-tax\/","title":{"rendered":"#Retirement Weekly: Is NIIT the same as the \u2018millionaire tax\u2019?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3b59a26e74c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3b59a26e74c\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/retirement-weekly-is-niit-the-same-as-the-millionaire-tax\/#The_Net_Investment_Income_Tax_comes_into_play_long_before_income_reaches_1_million\" >The Net Investment Income Tax comes into play long before income reaches $1 million<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/retirement-weekly-is-niit-the-same-as-the-millionaire-tax\/#Dan_Moisand\" >Dan Moisand<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Retirement Weekly: Is NIIT the same as the \u2018millionaire tax\u2019?<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"The_Net_Investment_Income_Tax_comes_into_play_long_before_income_reaches_1_million\"><\/span>\n  The Net Investment Income Tax comes into play long before income reaches $1 million<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\" role=\"region\" aria-label=\"article body\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000498161\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000498161\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       <strong>Q.:<\/strong> You mentioned in a column that there is a 3.8% \u201cNet Investment Income Tax.\u201d Is that the millionaire tax I keep hearing about Congress considering? <\/p>\n<p> \u2013Keith in Tampa<\/p>\n<div class=\"paywall\">\n       <strong>A.:<\/strong>\u00a0Keith, no. The Net Investment Income Tax (NIIT) has nothing to do with having a million-dollar net worth and it comes into play long before income reaches a million. The NIIT is triggered once Modified Adjusted Gross Income (MAGI) reaches $200,000 for a single filer, $250,000 for a joint filer, $125,000 for a married person filing separately. For a trust or estate, NIIT will <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ly to the lesser of undistributed net investment income (basically income not paid out to a beneficiary) or Adjusted Gross Income (\u201cAGI\u201d) if the trust\/estate is in the top marginal tax bracket which begins at only $13,050.<\/p>\n<p>The 3.8% tax applies to the <em>lesser<\/em> of the Net Investment Income or the amount by which MAGI exceeds the threshold. For example, if a couple filing a joint return has a MAGI of $300,000 and Net Investment Income of $30,000, they exceed the threshold by $50,000 and the $30,000 is subject to $1,140 of tax ($30,000 X 3.8%). If a second couple also had $300,000 of MAGI but $80,000 was Net Investment Income, their tax would be $1,900 ($50,000 X 3.8%).<\/p>\n<p>I won\u2019t list every component of MAGI or Net Investment Income here, but I\u2019ll give you the highlights as of 2021. You can follow the details by running through <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-8960\" class=\"icon none\">Form 8960 and its instructions<\/a>. These items for MAGI and Net Investment Income are not set in stone. As I write this, there are proposals in Congress to add additional items to the list of Net Investment Income.<\/p>\n<p>The most common components of MAGI include:<\/p>\n<ul class=\"articleList\">\n<li>\n      Wages, taxable <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security, taxable alimony, compensation (including deferred compensation)<\/p>\n<\/li>\n<li>\n      Taxable distributions from IRAs, Roth IRAs, retirement plans, 529 plans, HSAs and nonqualified annuities<\/p>\n<\/li>\n<li>\n      Taxable interest and dividends<\/p>\n<\/li>\n<li>\n      Capital gains and taxable gains from the sale of other property<\/p>\n<\/li>\n<li>\n      Rents and royalties<\/p>\n<\/li>\n<\/ul>\n<p>Net Investment Income includes among other things:<\/p>\n<ul class=\"articleList\">\n<li>\n      Capital gains<\/p>\n<\/li>\n<li>\n      Interest and dividends<\/p>\n<\/li>\n<li>\n      Rents and royalties<\/p>\n<\/li>\n<li>\n      Nonqualified annuity distributions<\/p>\n<\/li>\n<li>\n      Income from a trade or business considered a passive activity<\/p>\n<\/li>\n<\/ul>\n<p>Net Investment Income does NOT include:<\/p>\n<ul class=\"articleList\">\n<li>\n      Wages, taxable Social Security, taxable alimony, deferred compensation, and self-employment income subject to self-employment taxes<\/p>\n<\/li>\n<li>\n      Pensions or taxable distributions from IRAs, Roth IRAs, retirement plans<\/p>\n<\/li>\n<li>\n      Tax exempt income such as municipal bond interest, exempted gains from the sale of a primary residence and life insurance death benefits<\/p>\n<\/li>\n<li>\n      Income from a trade or business not considered a passive activity<\/p>\n<\/li>\n<\/ul>\n<p>One consideration about this is if you are near the thresholds mentioned earlier or contemplating increasing your MAGI over the threshold due to something like an IRA distribution or Roth conversion, it can be a worthwhile exercise to evaluate how those things may subject your investment earnings to the NIIT.<\/p>\n<p>For instance, taxable amounts attributable to a Roth conversion are not included in Net Investment Income but if the conversion pushes you above the MAGI threshold, you may subject your investment income to the additional tax.<\/p>\n<p><em>If you have a question for Dan, please <\/em>email him<em> with \u201cMarketWatch Q&amp;A\u201d on the subject line.\u00a0Dan Moisand is a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/moisandfitzgerald.com\/\" class=\"icon none\">financial planner at Moisand Fitzgerald Tamayo<\/a> serving clients nationwide from offices in Orlando, Melbourne, and Tampa Florida. His comments are for informational purposes only and are not a substitute for personalized advice. Consult your<\/em><\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Dan Moisand\",\"subhead\":\"The Wall Street Journal\",\"list\":[,{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:dan@moisandfitzgerald.com\",\"text\":\"dan@moisandfitzgerald.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Dan_Moisand\"><\/span>Dan Moisand<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<div class=\"mw-author-contributor\">MarketWatch Contributor Network<\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-7799-F17C91E66B58%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Retirement Weekly: Is NIIT the same as the \u2018millionaire tax\u2019?&#8221; The Net Investment Income Tax comes into play long before income reaches $1 million Q.: You mentioned in a column that there is a 3.8% \u201cNet Investment Income Tax.\u201d Is that the millionaire tax I keep hearing about Congress considering? \u2013Keith in Tampa A.:\u00a0Keith, no&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":372944,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-440624\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-372942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/372942","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=372942"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/372942\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/372944"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=372942"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=372942"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=372942"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}