InsuranceNewsNet Magazine February 2012 : 38
T by Sonja Hayes once it exceeds certain thresholds. For a married couple filing jointly, this thresh-old is $250,000 Adjusted Gross Income (AGI). And for a single person, the threshold i s $2 00,000 AG I . O n c e these income le v e l s a r e reached, this surtax will apply to their investment income. Similarly, this tax will apply to a trust once it has undis-tributed net income of at least $12,200. For a better understanding of the impact of this additional tax, let’s examine a typical middle-aged family. Meet the Spencers, Greg and Nancy, both 45, and their two kids, John and Jennifer. Greg and Nancy have an adjusted gross income of $300,000. Of this, $250,000 comes from wages, $24,000 is from their rental home on the beach, $10,0 0 0 is interest from CDs and money market accounts, and the remaining $16,000 is derived from vari-ous stocks, bonds and mutual funds. At this income level, the Spen-cers will be subjected to the additional 3.8 percent Medicare sur-tax on $50,000, which c o m e s t o $1,9 0 0 . Although this does not seem like a large number, axes are a certainty in life, as Ben Franklin said, but here is another one: Taxes will drive you batty. That’s because taxes will increase, decrease or stay the same—and you can’t predict which route they will take. Although we are left guessing about future rates, we do know that we are experiencing some of the lowest mar-ginal tax rates in history. In 2013, existing tax cuts for ordinary and capital income are set to expire. But who knows what Congress will do by then. In addition to this scheduled increase in marginal tax rates, 2013 will also have the imple-mentation of a new tax on investment income. This is a 3.8 percent Medicare tax on investments, while Medicare taxes have traditionally been paid only by individu-als and only on earned income. In 2013, this tax will be applicable to individuals and on income 38 InsuranceNewsNet Magazine February 2012
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