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

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

Archive