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

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

Archive