Tax Insights: Planning Around the Net Investment Income Tax

The 3.8 percent net investment income tax took effect at the beginning of 2013. It only affects higher-income individuals, but that can include anyone who happens to have big one-time taxable income or gains in one year. There are several planning strategies that individuals can implement to avoid or minimize the tax.

The Weaver Tax Insights document, Wealth Management: Plan Around the Net Investment Income Tax, explains the tax and mitigation tactics further:

• Types of income and gain exposed to the tax
• Individuals affected
• Strategies to reduce the new tax
• Targeting those planning strategies
• Case studies

Some strategies and planning can take time to implement, so it’s important to talk with your advisor now rather than later. For a discussion specific to your organization, please contact Carrie Hardison, partner, tax and strategic business services.