Everyone bill Lessman here for money evolution dot-com and welcome back to another one of our daily live videos where we're broadcasting to you every week day Monday through Friday so this is actually episode number four last week an episode two I think it was I started to talk with all of you about what I referred to as the seven core elements of retirement planning and how each one of these seven elements is going to play a part in your ultimate retirement goals and some of the things that you want to accomplish in retirement things like knowing how much you retire is going to cost we talked about that a little bit identifying your gap where to save money what types of accounts are going to be best for your retirement dollars deciding when to collect Social Security obviously a big one we talked a little bit about healthcare costs and how that needs to play in there the 401k plan for many people is going to be another big aspect of your retirement and knowing how to unlock the full potential of that 401k plan as you get closer to your retirement starting to create that plan for income and then finally the last thing we get to after going through each one of those seven steps is choosing your investments and unfortunately many people start with number seven so what I'm going to do here today in this video is I'm going to be expanding on one of these seven elements we're gonna be talking about where to save money and specifically I'm going to be talking about some of the tax implications of where you save money and how that it might impact your retirement and the amount of money that you have...
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Medicare surcharge tax on high-income taxpayers Form: What You Should Know
Net Investment Income Tax or Medicare Tax is imposed on earned investment income in excess of the threshold amount: Medicare's 3.8% Tax on Investment Income The threshold amount is defined under Section 1411; however, it only applies to taxable individuals who earn more than the threshold on taxable investment income. In general, investment income (other than retirement plan and annuity income) and capital gains are not taxed until a taxpayer's tax-filing period begins. The first taxable year that a taxable individual earns investment income in excess of the threshold will be the same as the tax-filing period immediately before the earning of the amount on which the additional income tax is calculated. Taxable Earnings: The Taxable Year of Withholding Most taxpayers filing their first 2023 income tax return during their tax-filing period are included in the taxable income of the taxpayer to whom the 3.8% tax is levied. For example, if an individual files a Form 1040A, that individual will be included in the 2023 tax return and will be liable for 3.8% tax on the adjusted gross income (AGI) in the 2023 tax return unless an exception applies. (An exception is provided below.) The taxable earnings of a taxpayer who does not file a Form 1040A or a Form 1040EZ are taxed in an additional manner. Capital gains and qualified dividends are taxed in the same manner as other income. For a summary of the capital gains portion of the 3.8% Medicare tax, please click here. Medicare Tax Exceptions The Medicare tax does not apply if any of the following conditions exist for the taxable year: You are a qualifying individual or a qualifying family member who met the qualifying threshold to claim the additional Medicare tax amount when you filed your income tax return for that year. Qualifying Individuals: Individuals who have a qualifying household size; Families: A family which includes more than one qualifying individual and is treated as a qualifying family for any tax year under the rules under section 1441; or Qualifying Trades: An individual who is, as a member of his or her own firm, or as a member of a partnership, or as a director of such a firm, employed as a chief financial officer of an active, qualified trade or business and is actively engaged in activities carried out in connection with or in furtherance of the active, qualified trade or business.
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