High-income taxpayers face a 3.8% net investment income tax (NIIT) that’s imposed in addition to regular income tax. Fortunately, there are some steps you may be able to take to reduce its impact.
The NIIT applies to you only if modified adjusted gross income (MAGI) exceeds:
- $250,000 for married taxpayers filing jointly and surviving spouses,
- $125,000 for married taxpayers filing separately,
- $200,000 for unmarried taxpayers and heads of household.
The amount subject to the tax is the lesser of your net investment income or the amount by which your MAGI exceeds the threshold ($250,000, $200,000, or $125,000) that applies to you.