With new taxes scheduled to take effect in 2013, wealthy Americans will be paying more taxes, including Hospital Insurance Tax of 0.9 percent and/or Medicare tax of 3.8 percent. Elections and two more sessions of Congress will take place before the new taxes are rendered, so anything can happen. Still wealthy Americans (and many who meet the requirements but don’t consider themselves wealthy at all) will want to take notice and begin preparations now.
Equifax Personal Finance Blog has more details on the specific taxes in the article, “
New Tax Increase for Wealthy Americans: Will You Pay More?” Tax expert Eva Rosenberg explains that the Hospital Insurance Tax will come out of the wages of individuals whose earned income is more than $200,000 or couples filing jointly with $250,000 in earned income. She defines earned income as “wages or profits from your Schedule C businesses and self-employment income from partnerships.”
The Medicare tax, on the other hand, will be levied on unearned income, including investments, passive income and capital gains. This time, the tax is on the modified adjusted gross income of at least $200,000 for individuals, $250,000 for couples filing jointly or $125,000 for couples filing separately. The tax also applies to trusts with undistributed income of at least $12,000.
Rosenberg offers several means of minimizing the impact of the tax on your bank account. One of those ideas is investment in real estate, but specifically in situations where you can generate passive losses while still getting some cash flow. In certain cases, the cash won’t be taxable, at least at the beginning of your ownership.
From self-directed Roth IRAs to buying life insurance to investing in copyrights, Rosenberg offers lots of ideas for avoiding the new taxes. Read them for yourself on the