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


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