August 8, 2013 1:53 pm

New tax forms

Starting in 2013, high-income taxpayers may owe an additional Medicare tax of 3.8% with respect to their net investment income (investment income in excess of investment-related expenses). The tax is 3.8% of the lesser of net investment income or modified adjusted gross income (MAGI) over threshold amounts dependent on filing status ($200,000 for singles; $250,000 for married filing jointly).

The IRS has released a draft of Form 8960, which will be used to figure this tax; it will be attached to Form 1040. The one-page form references investment income, such as dividends, interest, capital gains, annuities, and rental income, from lines on Form 1040.

There is no withholding for this tax, so if you expect to owe this tax, increase wage withholding or estimated tax payments accordingly.


Tax Glossary

Separate return

Return filed by a married person who does not file a joint return. Filing separately may save taxes where each spouse has separate deductions, but certain tax benefits require a joint return.

More terms