DGAA bLAWg

The Effect of the Affordable Care Act on Income Taxes

Web Admin - Tuesday, January 28, 2014

illinois obamacare tax lawyerThe Affordable Care Act (ACA or "ObamaCare") is a sweeping reform that touches many different areas of the law. One particular area that it impacts is the income tax structure. The law makes many small changes, such as increasing the threshold for deducting a medical expense to 10 percent of a person's adjusted gross income, or adding a new 0.9 percent tax to wages above $200,000. 

But, one particular change can have a large effect on income from real estate sales and trusts. The ACA adds a new 3.8 percent tax on a person's net investment income. But, this new tax only applies to certain people, and often, but not always, those in higher tax brackets.

The Effect on Real Estate Sales

The 3.8 percent tax applies to some sales of real estate, but not to all sales. First, the tax only applies to people making more than $200,000 a year or $250,000 for married couples filing jointly. Even for those people, not all sales qualify. This is because the first $250,000 of profit on the sale of the home does not count as income if the home is the person's primary residence.

And, that number goes up to $500,000 for married couples. A primary residence is a home that has acted as the sellers “main home” for two of the last five years. By way of example, suppose a married couple making over $250,000 a year sold their primary residence for a net profit of $650,000. They would only pay the 3.8 percent tax on the $150,000 in profits that exceed the $500,000 cap.

The Effect on Trusts

Even though the tax only applies to individuals making more than $200,000, it can also affect trusts with more than approximately $12,000 in net investment income, regardless of the beneficiary's income. This means that the tax can affect people earning less than $200,000 if they have an interest in such a trust. In this instance, the 3.8 percent tax applies to all net investment income in excess of the $12,000 cap. However, the law contains many exemptions and exceptions. For instance, certain types of trusts that do not qualify as trusts for purposes of income tax also fall outside of this law.

If you have questions about how the ACA affects your taxes or think you may be subject to the new net investment income tax, contact an Arlington Heights tax attorney today. Call 847-934-6000 to speak to a member of our team. We serve many Northwest Suburban areas including Rolling Meadows, Des Plaines, Crystal Lake, and other nearby communities.

About the Author: Attorney Jay Andrew is founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.



Recent Posts


Tags

Des Plaines criminal attorney Crystal Lake personal injury attorney Illinois insurance claims lawyers living trust Palatine trusts lawyer paid sick leave Long Grove real estate attorney Fourth of July Crystal Lake insurance lawyer Illinois workplace lawyer Illinois bicycle safety rent to own real estate contracts Schaumburg real estate lawyer personal injury claims probate fees Illinois home inspection DMV foreclosed rental property Chicago car accident lawyer trustee Crystal Lake criminal defense attorney Barrington medical malpractice lawyers problem employees Barrington injury attorney Schaumburg corporate attorney insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys drunk driving statistics health insurance dispute product liability Liquor Control Act employment law, Illinois employment laws Illinois workers compensation attorney mass shooting Buffalo Grove traffic lawyers estate planning trusts defective products liens Illinois wills and trusts bike accident mortgage marijuana crimes attorney FMLA living wills Illinois pedestrian accident attorney Des Plaines personal injury lawyers real estate closing Deer Park DUI lawyer insurance dispute insurance claims Schaumburg injury lawyer insurance claim dispute attorney Illinois Transfer on Death Instrument Deer Park employment law attorney estate planning for college students DGAA vacation home Buffalo Grove traffic attorney Palatine traffic lawyer capital gains tax dog bites social media after death fault based insurance llinois Real Estate Lawyers Association nursing home negligence disability benefits Illinois construction accident attorney Schaumburg insurance lawyers Arlington Heights accident attorney elder law car crash hiring employees privacy swimming pools appealing an insurance claim Illinois LLC creation criminal record expungement home inspection lawyer Crystal Lake medical malpractice lawyer medical malpractice real estate Arlington Heights employment attorney Rolling Meadows business lawyer Illinois medical malpractice lawyers criminal Barrington real estate lawyer Inverness DUI lawyer living trust benefits Palatine construction attorney insurance agents Palatine Attorney Inverness civil lawyer license Illinois insurance claim dispute lawyer BAIID employment law Employment Discrimination Law liability Illinois insurance dispute lawyers life insurance policy Palatine personal injury lawyer workers compensation PTSD Inverness probate lawyer Mt Prospect Attorney Mount Prospect real estate lawyer income distribution deducation insurance adjusters Crystal Lake injury attorney Chicago traffic lawyer Schaumburg civil litigation attorney business litigation first degree murder Crystal Lake accident attorney Barrington criminal lawyer gift taxes ObamaCare Retaliatory Discharge real estate attorneys living trust vs will Illinois business lawyer unpaid assessment Buffalo Grove insurance claim dispute lawyers owner responsibility Deer Park criminal attorney Des Plaines pet law attorney Illinois law workers compensation benefits digital assets license reinstatement Crystal Lake bike accident lawyer Schaumburg personal injury lawyer Mount Prospect elder law attorney driving Crystal Lake traffic attorney pain and suffering Barrington boating accident attorney car accident guardianship attorney involuntary manslaughter Des Plaines claims law firm Des Plaines DUI attorney Illinois tax attorney Rolling Meadows marijuana attorney texting while driving employment attorney breathalyzer test Illinois injury lawyer reckless homicide Illinois estate planning attorney license suspension Long Grove estate planning Palatine elder law attorney civil litigation attorney Illinois Probate Act of 1975 Illinois motorcycle accident lawyer Crystal Lake car accident lawyer dram shop law Affordable Care Act Rolling Meadows insurance lawyer underinsured motorist estate planning Arlington Heights personal injury lawyer Schaumburg Attorney pedestrian injuries, pedestrian fatality Crystal Lake pet attorney forming a corporation in Illinois Arlington Heights injury attorney IRS Illinois trucking safety Rolling Meadows litigation lawyer insurance attorney Barrington Illinois estate planning lawyer employment lawyer Des Plaines insurance attorney Rolling Meadows traffic attorney Barrington business law firm Des Plaines drug lawyer insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys Chicago will attorney automated cars Illinois employment law attorneys Detainer Actions digital media accounts, estate planning, Arlington Heights estate planning attorney, Rolling Meadows probate lawyer fiduciary rule pedestrian accident Policy Cancellation gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys Buffalo Grove personal injury attorney natural gas explosion small business Barrington personal injury lawyer Palatine probate lawyer Kenilworth estate planning attorney murder charges Crystal lake insurance dispute attorney Deer Park medical malpractice attorney South Barrington real estate attorney life insurance lawyer comparative negligence civil litigation Landlord Tenant Ordinance Rolling Meadows insurance dispute lawyers workers comp Crystal Lake employment attorney Palatine traffic accidents landlord traffic crimes GM ignition switches holiday statistics insurance claim denials Illinois medical malpractice case Arlington Heights employment law attorneys rollover car crashes trauma after an accident distracted driving accident victims Illinois workplace discrimination attorney Barrington estate planning lawyer employee discrimination insurance claim denial Palatine injury attorney pregnant women brain injury Rolling Meadows car accident lawyers Schaumburg Rolling Meadows insurance attorney Rolling Meadows medical malpractice lawyers blended families Attorney Ken Apicella controlled substance Illinois insurance claim attorney operating agreements Illinois will lawyer Chicago insurance law firm medical malpractice compensation Crystal Lake medical malpractice law firm contracts texting and driving financial advisors denied insurance claim LLCs insurance claim internet Arlington Heights tax lawyer Illinois real estate lawyer estate plan filing a medical malpractice claim Crystal Lake personal injury lawyer bicycle accidents severance agreements IRELA changes to mortgage law denial of life insurance underfunded trust Family Medical Leave Act Schaumburg wrongful death attorney cell phone tower data Illinois collections attorney insurance dispute attorney Buffalo Grove injury lawyer wills independent contractor real estate contract Inverness personal injury attorney Rolling Meadows insurance dispute lawyers, insurance dispute comp time license revocation Illinois insurance lawyer Arlington Heights car crash attorneys Arlington Heights estate planning attorney products liability subcontractor no contest clauses ACA tax attorney attorney fees Illinois defective products attorney Schaumburg employment attorney car accident lawyers denied insurance claims Schaumburg personal injury attorney Deer Park traffic lawyer homestead rights senior citizens Illinois business law atorneys Illinois mortgages unpaid overtime Illinois Trust Code Crystal Lake pedestrian accident lawyer drug crime pet bites Self-Directed IRA Accounts DUI attorney DUI defense Arlington Heights wills and trusts lawyer Arlington Heights traffic attorney Mount Prospect wills and trusts lawyers Des Plaines injury law firm Chicago lawyer modern family estate planning Illinois rollover accident lawyers Rolling Meadows estate planning attorney Illinois traffic attorneys Chicago insurance claim attorneys Rolling Meadows work unions personal injury accidents Forcible Entry Inverness real estate attorney estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers drunk driving Illinois insurance attorney condo Rolling Meadows personal injury lawyer Deer Park workers compensation lawyer installment contracts digital evidence employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys child safety Schaumburg probate attorney Schaumburg estate planning lawyer DNR Rolling Meadows criminal attorney Illinois employment attorneys Schaumburg estate planning attorney Crystal Lake estate planning lawyer Illinois personal injury lawyers civil rights violation Buffalo Grove real estate attorney overtime pay Arlington Heights wills and trusts lawyers auto accidents Class A misdemeanor DUI penalities real estate zoning personal injury Schaumburg personal injury lawyers probate process Illinois attorney Illinois insurance claim dispute lawyers jet ski accidents Rolling Meadows real estate attorney Chicago estate planning wrongful death accidental death benefits Illinois wrongful termination lawyer foreclosure Illinois traffic accident lawyer insurance denial appeals Inverness injury lawyer Palatine corporate law attorneys liability claims TBI Illinois small business traffic laws medical research drugs sole proprietorship Illinois medical malpractice claim federal regulations for LLCs trusts CAM loopholes construction contracts Chicago biking tips criminal defense Illinois elder law attorney medication errors drug possession traffic violations Barrington civil litigation attorney Arlington Heights criminal lawyer Des Plaines civil attorney Illinois probate lawyer suspended license Whistleblower Claims commercial leases boating under the influence golf accidents Inverness real estate lawyer commercial leasing pedestrian-automobile accident trust payments employee misclassification food poisoning wrongful termination Barrington estate planning attorney truck collisions murder defense Inverness corporate attorney Illinois registered agent employees Palatine punch death Illinois car accident attorney premises liability probate claims Deer Park traffic accident attorney Arlington Heights Attorney Inverness accident lawyer Buffalo Grove law firm new real estate form Riverwoods estate planning lawyer Crystal Lake employment lawyer insurance denials power of attorney Arlington Heights pedestrian accidents rollover accidents Inverness traffic law firm Illinois Sales Representative Act drug crimes lawyer Palatine employment law lawyer Jay Andrew Barrington personal injury attorney Rolling Meadows Traffic Lawyer Des Plaines real estate lawyer Des Plaines motorcycle accident attorney federal crimes natural gas Schaumburg traffic lawyer Crystal Lake will lawyer Illinois employment law attorney Illinois living will caretaker rights Illinois pet lawyer Illinois jet ski accident lawyer Joliet general practice lawyers spinal cord injury personal injury lawyer Illinois Smoke Detector Act murder life insurance IRA benefits clemency Illinois trusts attorney Schaumburg construction accident lawyer defective products lawyer POA pay when paid contract Arlington Heights insurance attorney sexual harassment Illinois workers compensation lawyer creditors sexual images Illinois employment law firm eluding a police officer Des Plaines accident attorney Des Plaines tax law firm Palatine insurance lawyer Colin Gilbert power of attorney for healthcare Rolling Meadows criminal lawyer cell phone accidents surgical mistakes probate lawyer criminal law Rolling Meadows traffic law firm Illinois speeding lawyer Barrington litigation attorney manufacturing Illinois job attorney Illinois estate planning estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, Palatine civil litigation lawyer Palatine law firm Illinois corporate lawyer car crash injuries Long Grove estate planning attorney Rolling Meadows Attorney medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers insurance disputes Food and Drug Administration's Food Safety Modernization Act Illinois employment law Chicago trucking accident attorney low-ball insurance settlement Long Grove real estate lawyer wills and trusts jet ski insurance claim delay fiduciary rule delay overtime violations caregiver Chicago attorney Rolling Meadows tax attorney traffic deaths pedestrian accidents Deer Park personal injury lawyer wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace commercial real estate marijuana Palatine corporate attorney Illinois personal injury lawyer Illinois FSLA Thanksgiving Deer Park accident attorney Long Grove estate planning attorneys Rolling Meadows employment law attorneys Rolling Meadows corporate lawyer estate planning lawyer Des Plaines real estate attorney Illinois personal injury medical marijuana Illinois personal injury attorney spinal cord injuries Home Sale Contingencies Crystal Lake medical malpractice attorneys Barrington workers compensation attorney Crystal Lake car accident attorney Palatine employment lawyer startup company insurance agent negligence uninsured motorist field sobriety test Barrington Traffic Lawyer Super Mario Illinois DUI attorney Illinois Wage Payment and Collection Act Illinois Workers’ Compensation Commission traffic offenses Kenilworth estate planning lawyer distracted driving accidents icy parking lots underage DUI corporate law Illinois medical malpractice attorney Arlington Heights personal injury attorney special needs trust breach of contract Barrington attorney Rolling Meadows accident lawyer workplace sexual harassment Schaumburg criminal attorney Barrington drug crime attorney Arlington Heights medical malpractice lawyer Illinois employment lawyer estate tax real estate attorney blood alcohol content DUI back injuries Fair Labor Standards Act landlord tenant law Illinois red light cameras Illinois traffic attorney Buffalo Grove medical malpractice lawyers Des Plaines Traffic Lawyer BAC institutional trustee Arlington Heights wills and trusts attorneys cell phone Rolling Meadows drug defense attorney Schaumburg elder law lawyer Illinois insurance disputes digital information pizza emoji Illinois lawyer deadly crashes speeding head on collisions Illinois real estate Chicago will attorney, social media platforms, Illinois estate planning lawyer, Des Plaines drug crimes lawyer Des Plaines medical malpractice attorney personal injury law firm life insurance claims Des Plaines personal injury attorney college kids medical malpractice claims construction accidents Palatine real estate lawyer unauthorized overtime Deer Park motorcycle accident lawyer Do Not Resuscitate Illinois boating accident lawyer Federal Food Drug and Cosmetic Act Des Plaines personal injury lawyer employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, Barrington employment attorney rumble strips Rolling Meadows boating crash lawyer Palatine civil attorney Illinois employee rights attorney. South Barrington real estate lawyer Schaumburg employment law attorneys Illinois traffic laws coronavirus whistleblower protections loss of consortium traffic accidents Buffalo Grove corporate attorney residential real estate advance healthcare directive Arlington Heights wills and trusts attorney Arlington Heights Traffic Lawyer employment contract car crashes meal breaks Des Plaines collections attorney Illinois wills and trusts attorneys healthcare claims Crystal Lake law firm Illinois driving without license Palatine employment attorney Illinois civil litigation lawyer preventing accidents probate claims process Inverness estate planning lawyer privacy laws IRA trust transfer motorcycle accident Chicago corporate attorney Arlington Heights TBI attorney pet law insurance claim dispute personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys elder abuse bicycle dooring accidents slip and fall Buffalo Grove car accident lawyer traffic violations defense Inverness elder law lawyer Illinois employment laws fatal car accidents consent to a search estate attorney preventable medical errors in terrorem provision personal injury attorney right to work Crystal Lake tax lawyer Crystal Lake traffic lawyer Illinois estate planning law firm Arlington Heights trucking lawyer bad faith insurance claims minimum wage Crystal Lake employment law attorney Buffalo Grove employment lawyer Barrington employment law attorney wage theft Crystal Lake business law attorneys Transfer on Death Instrument Palatine business attorney Buffalo Grove probate lawyer probate Palatine estate planning lawyer agent Schaumburg estate attorney Legal Info digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers Arlington Heights lawyer trucking accident lawyers slip and fall accidents estate planning attorney Schaumburg criminal law attorney Chicago estate planning lawyer Palatine drug lawyer Crystal Lake civil litigation lawyer traumatic brain injuries car collision Illinois traffic ticket lawyer Palatine workers compensation lawyer healthcare Buffalo Grove criminal defense lawyer Barrington employment law firm hands free device boating DUI drug crimes Deer Park real estate law firm construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation revenge porn Schaumburg drug defense lawyer traumatic brain injury personal injury claim Rolling Meadows employment law attorney employee rights School Visitation Rights Act Palatine criminal defense lawyer vacation home fines BUI Rolling Meadows DUI lawyer car accidents hit and run accident Inverness insurance attorney Rolling Meadows personal injury lawyers Illinois criminal defense attorney ken apicella Arlington Heights car accident lawyer insurance negligence Kenilworth estate planning attorneys dealing with problem employees investment property real estate leasing Rolling Meadows employment attorney boating accidents rest breaks Chicago employment lawyer Exclusions real estate lawyer Rolling Meadows personal injury attorney Schaumburg car accident attorney crossover accidents trucking accidents car accident lawyer compensatory time unfunded trust deed transfer Home Remodeling Repair Act Chicago employment attorney anesthesia errors Arlington Heights real estate lawyer condo association Schaumburg medical malpractice lawyer trench injuries dynasty trusts motorcycle accident lawyer Des Plaines Illinois Human Rights Act Buffalo Grove personal injury lawyer irrevocable trust job lawyers Barrington criminal defense lawyer taxes Colin H. Gilbert Long Grove wills and trusts attorneys traffic tickets

Archive