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December 04, 2012
IRS Issues 159 Pages of New Rules About Obama's Socialized Medicine (Obamacare)
(Reuters) - The Internal Revenue Service has released new rules for investment income taxes on capital gains and dividends earned by high-income individuals that passed Congress as part of the 2010 healthcare reform law.
The 3.8 percent surtax on investment income, meant to help pay for healthcare, goes into effect in 2013. It is the first surtax to be applied to capital gains and dividend income.
The tax affects only individuals with more than $200,000 in modified adjusted gross income (MAGI), and married couples filing jointly with more than $250,000 of MAGI.
The tax applies to a broad range of investment securities ranging from stocks and bonds to commodity securities and specialized derivatives.
The 159 pages of rules spell out when the tax applies to trusts and annuities, as well as to individual securities traders.
Released late on Friday, the new regulations include a 0.9 percent healthcare tax on wages for high-income individuals.
Both sets of rules will be published on Wednesday in the Federal Register.
The proposed rules are effective starting January 1. Before making the rules final, the IRS will take public comments and hold hearings in April.
Together, the two taxes are estimated to raise $317.7 billion over 10 years, according to a Joint Committee on Taxation analysis released in June.
To illustrate when the tax applies, the IRS offered an example of a taxpayer filing as a single individual who makes $180,000 in wage income plus $90,000 from investment income. The individual's modified adjusted gross income is $270,000.
The 3.8 percent tax applies to the $70,000, and the individual would pay $2,660 in surtaxes, the IRS said.
The IRS plans to release a new form for taxpayers to fill out for this tax when filing 2013 returns.
The new rules leave some questions unanswered, tax experts said. It was unclear how rental income will be treated under the new rules, said Michael Grace, managing director at Milbank, Tweed, Hadley & McCloy LLP law firm in Washington.
"The proposed regulations surely will increase tax compliance burdens for individuals," said Grace, a former IRS official. "There's clearly some drafting left to be done."
Wild Thing's comment................
Very scary and very concerning.
Posted by Wild Thing at December 4, 2012 02:55 AM
Comments
This is what a majority of Americans voted for.
Posted by: BobF at December 4, 2012 07:59 AM
The health aspect of obamacare is probably minimal. The primary purpose of obamacare is govt. growth and govt control of all aspects of our daily lives. It is Marxism through class envy. It is a deliberate attack on The US Constitution by an evil man who studied constitutional law. It is an attack on capitalism by punishing the investor class through heavy taxation. obamacare is as vicious attack on America as 9-11.
Posted by: TomR,armed in Texas at December 4, 2012 10:31 AM
Thank you so much Bob and Tom. I appreciate it soooo much to get your input.
Posted by: Wild Thing at December 5, 2012 03:14 AM
