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


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