When the Affordable Care Act went into effect in 2013, there were 2 Medicare taxes that were enacted to fund it.
The key Medicare tax associated with the Affordable Care Act affects those with higher MAGIs (Modified Adjusted Gross Income).
How It Works
Those limits are $250,000 Married Filing Jointly and $200,00 Single.
Here’s a chart that perhaps serves to alleviate the confusion over this Medicare tax.
This tax has been in effect since 2013, when the Affordable Care Act went into effect.
The Affordable Care Act went into effect to make health insurance more affordable for people who aren’t covered in a group plan.
It’s good to be aware of your income taxes, including the ones related to the Affordable Care Act.
While you don’t want the tax tail to wag the investment dog, it makes sense to ensure you at least know how any profits you take against your sales will be impacted with the Medicare tax.
At the end of the day, it’s a nice problem to have.
(Chart courtesy of Fidelity Investments.)
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.