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

April 10 — Employees who work for tips
If you received $20 or more in tips during March, report them to your employer. You can use Form 4070.

April 10 — 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 March.

April 14 — Regular method taxes
Deposit the tax for the last 16 days of March.

April 18 — Individuals
File a 2016 income tax return (Form 1040, 1040A, or 1040EZ) and pay any tax due. If you want an automatic 6 month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. For more information, see Form 4868. Then, file Form 1040, 1040A, or 1040EZ by October 16.

April 18 — Corporations
File a 2016 calendar year income tax return (Form 1120) and pay any tax due. Details

April 18 — Individuals
If you are not paying your 2017 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2017 estimated tax. Use Form 1040ES.

April 18 — Household Employers
f you paid cash wages of $1,800 or more in 2016 to a household employee, you must file Schedule H Details

April 18 — Corporations
Deposit the first installment of estimated income tax for 2017 Details

April 18 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in March.

April 18 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in March.

April 18 — Household employers
If you paid cash wages of $1,900 or more in 2016 to a household employee, you must file Schedule H (Form 1040). If you are required to file a federal income tax return (Form 1040), file Schedule H (Form 1040) with the return and report any household employment taxes. Report any federal unemployment (FUTA) tax on Schedule H (Form 1040) if you paid total cash wages of $1,000 or more in any calendar quarter of 2015 or 2016 to household employees. Also, report any income tax you withheld for your household employees.

April 27 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 16 days of March.

April 29 — Regular method taxes
Deposit the tax for the first 15 days of April.

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