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

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

Archive