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


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