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


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