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

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

Archive