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

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

Archive