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


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