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

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

Archive