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

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

Archive