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

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

Archive