If you have income from investments, you may be subject to the Net Investment Income Tax. You may owe this tax if you receive investment income and your income for the year is more than certain limits. Here are some key tips you should know about this tax:

  • Net Investment Income Tax. The law requires a tax of 3.8 percent on the lesser of either your net investment income or the amount by which your modified adjusted gross income exceeds a threshold amount based on your filing status.
  • Income threshold amounts. You may owe this tax if your modified adjusted gross income is more than the following amount for your filing status:

  • Filing Status Threshold Amount
    Single or Head of household 200,000
    Married filing jointly $250,000
    Married filing separately $125,000
    Qualifying widow(er) with a child $250,000
  • Net investment income. This amount generally includes income such as:
    • Interest,
    • Dividends,
    • Capital gains,
    • Rental and royalty income, and
    • Non-qualified annuities.

    This list is not all-inclusive. Net investment income normally does not include wages and most self-employment income. It does not include unemployment compensation, Social Security benefits or alimony. It also does not include any gain from the sale of your main home that you exclude from your income.

    Refer to Form 8960, Net Investment Income Tax, to see if this tax applies to you. You can check the form's instructions for the details on how to figure the tax.

  • How to report. If you owe the tax, you must file Form 8960 with your federal tax return. If you had too little tax withheld or did not pay enough estimated taxes, you may have to pay an estimated tax penalty.

For more on this topic, visit IRS.gov/aca.

TaxAct guides you step by step to help determine if you are subject to the Net Investment Income Tax. If you are subject to the tax, TaxAct will automatically calculate the amount and complete your tax forms. File your federal tax return free with TaxAct Free Edition, the most complete free filing solution for simple and complex return.

Additional IRS Resources:

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Upcoming Tax Dates

May 2 — Social security, Medicare, and withheld income tax
File Form 941 for the first quarter of 2017. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until May 10 to file the return.

May 2 — Federal unemployment tax.
Deposit the tax owed through March if more than $500.

May 2 — Form 720 taxes
File Form 720 for the first quarter of 2017.

May 2 — Wagering tax
File Form 730 and pay the tax on wagers accepted during March.

May 10 — Employees who work for tips
If you received $20 or more in tips during April, report them to your employer Details

May 10 — Social security, Medicare, and withheld income tax
File Form 941 for the first quarter of 2017. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

May 11 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the first 15 days of April.

May 13 — Regular method taxes
Deposit the tax for the last 15 days of April.

May 16 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in April.

May 16 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in April.

May 25 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 15 days of April.

May 27 — Regular method taxes
Deposit the tax for the first 15 days of May.

May 31 — Wagering tax
File Form 730 and pay the tax on wagers accepted during April.

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