The New Investment Tax


Until the last week of June, investors were waiting to see what the Supreme Court would do about the 3.8 percentage point tax on investment income – part of the 2010 health care overhaul. The new tax starts January 1, 2013 and affects joint filers that have an adjusted gross income greater than $250,000 or $200,000 for single filers. Long-term capital gains will jump from 15% to 18.8% for these earners.  When the court affirmed the law, investors and tax advisors started planning and looking for answers.  The IRS has not released guidance on the new law.

A New Level of Planning

Many Americans will not be affected by this new tax. However, those that do fall under the new tax guidelines will find managing their long-term gain taxes just as important as managing personal and business taxes. Assuming the law is not repealed by Congress, many affluent investors may find it advantageous to take long-term gains this year prior to the onset of the new tax. In addition, many may seek to shelter assets where the tax does not apply. These include municipal bond funds and tax deferred accounts.  Bottom line, now is the time to start planning for this tax. A solid plan leading up to the new investment tax using both your investment advisor and accountant could save you thousands in taxes.

Kevin McNab

This article is written by Kevin J. McNab. Kevin is President of ACE Wealth Partners, LLC and is a CFP®, ChFC®, and CRPC®. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by ACE Wealth Partners, LLC unless a client service agreement is in place. If you have any questions regarding this Blog Post, please Contact Us. Please read our website DISCLOSURE carefully for additional information.