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


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