Is your gross income over $250,000? $200,000 if unmarried?
Do you have significant net investment income, which includes things like, interest, dividends, annuities, royalties, rent and capital gains?
Do you have significant income from Partnership or S Corporation investments where you don’t actively participate in the business (“passive activities”)?
If you answered yes to the first, and either the second or third questions above, you need to be aware of your potential exposure to this unprecedented new tax. The Health Care and Education Reconciliation Act of 2010 created a Medicare contribution tax on unearned income. This additional Medicare tax is scheduled to begin on 01/01/13 but it is not too early to start thinking about this issue and monitoring the amounts and types of income being generated in 2012 vs. later years. Click here for details.