2013 Medicare Tax: 3.8% Stealth Tax

2013 Medicare Tax: 3.8% Stealth Tax

The Supreme Court has recently ruled that the new health care act is constitutional.  As a result, on January 1, 2013, as part of this health care law, the new 3.8% medicare tax will start to impact many taxpayers.  It would seem prudent for taxpayers to plan now for this new stealth tax.   Basically, this new extra 3.8% tax applies to the lesser of

  1. Net investment income or
  2. The excess of modified adjusted gross income (MAGI) over the “threshold amount.”

Threshold Amount: The threshold amounts are dependent on the type of taxpayer.  Here are the threshold amounts for various taxpayers:

  1. For married taxpayers filing jointly, the threshold amount is $250,000
  2. Married filing separately, the threshold amount is $125,000
  3. All other individual taxpayers, the threshold amount is $200,000.
  4. For trusts and estates, the threshold amount is $11,650.

This is just a basic overview.  To learn more about this stealth tax please read 2013 SNEAKY NEW TAX:  Not Too Early to Plan For The 3.8 Percent Medicare Tax On Investment Income.  This article provides more details about this tax, its scope, limitations and exclusions.  The article also provides examples of how this tax operates.

With 2013 quickly approaching, it is not too soon to become aware of this new stealth tax and look at methods to possibly lessen the impact of this tax.

0 0 votes
Article Rating
Notify of

Inline Feedbacks
View all comments

1420 Walnut Street Suite 300
Philadelphia, PA 19102

Telephone: 215-735-2336

Email: sjfpc@comcast.net
Connect With Us:


In order to help you more quickly, please
fill out the form and click “submit”.
A representative of the firm will call you shortly.

  • This field is for validation purposes and should be left unchanged.

From their offices in Philadelphia, PA, the law firm of Steven J. Fromm & Associates, P.C. provides a full range of estate planning, probate and estate administration, tax, business and corporate legal services to clients throughout eastern Pennsylvania and the Delaware Valley, the Lehigh Valley Area, the Five-County Area, Bucks County, Delaware County, Montgomery County, Chester County, Philadelphia County, Berks County, Lehigh County, Lancaster County, York County, Harrisburg, Norristown, Doylestown, Media, West Chester, Allentown, Lancaster, and Reading.

Would love your thoughts, please comment.x