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The author is a Norristown, PA tax and estate-planning specialist, and an editorial consultant to this magazine.
ACA includes a new tax on income. See whether you might be paying more taxes.
A: Yes, but only for taxpayers who are single and who have annual incomes of more than $200,000 and for joint filers with income of more than $250,000. For people in these categories, the law includes a special surtax of 3.8% that applies to investment income such as interest, capital gains, dividends, rental income, and earnings distributed from annuities.
Although we don't yet know what the capital gains tax rates will be for next year, this additional tax probably will motivate high earners to accelerate income into 2012 when possible. Although you have limited control over interest and dividends, you can sell appreciated securities during 2012 so that you incur capital gains in 2012 and avoid the additional tax that will apply in 2013.
Answers to our readers' questions were provided by David J. Schiller, JD, a tax attorney in Norristown, Pennsylvania, and a Medical Economics editorial consultant. Send your money management questions to firstname.lastname@example.org Also engage at http://www.twitter.com/MedEconomics and http://www.facebook.com/MedicalEconomics.