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Taxes Increased Under Obamacare for Investors

Forgotten in the most of the political back and forth over Obamacare, President Obama’s health care law that was passed during his first two years in office while his party held both the White House and both Houses of Congress, was that there is a tax inside that bill.  Most of the news has been about Justice Roberts writing on behalf of the 5-4 majority in the Supreme Court finding that the Obamacare bill was constitutional as it was a tax by Congress, and that Congress has the authority to raise taxes.  

The Administration had argued in passing the law that it was constitutional under the Commerce Clause in that health care effects commerce within different states, but most legal scholars acknowledge that it was not constitutional under the Commerce Clause.  However, Justice Roberts and the majority found that the bill is basically a tax bill and that Congress has the authority to raise taxes under the Constitution and, therefore, Congress had authority to pass this bill.

Part of the Obamacare bill was found to be unconstitutional, but the majority of it was found to be constitutional.  That includes the 3.8% surtax on investments for certain investors.  That additional tax will be a tax due as part of your income tax and is something you’ll need to speak with your CPA or accountant about.  This is also a tax that will be implemented in the upcoming year starting January 1, 2013.  It is an additional tax that will need to be reported and paid in the year 2013 forward on your 1040 (individual or married) tax return.  You will want to meet with your CPA or accountant if you do have investments and see if this additional new income tax applies to you. 

Remember, there are now three (3) levels of income tax you need to plan for: your basic income tax, the possible alternative minimum tax on top of that, and now they have added a third level of income tax—a surtax on investments in addition to the first two income taxes.

At the Law Firm of Steven Andrew Jackson, Attorney and Counsellor at Law, we have helped hundreds of families protect themselves and their loved ones, avoid Estate Taxes and Probate Costs, and keep their Estate Plans current with the law through The Customized Protective Estate Planning Solution™.