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New Tax on Investment Income to start January 1!

Posted in Buying, Owning and Selling a Business, Operating a Business

While we await resolution of the fiscal cliff issues, one thing is for certain: there will be a new medicare tax of 3.8% that will apply to investment income as of this coming year. While such taxes have always been associated with “earned” income, this is a new thing, that it will apply to “investment” income. This is a result of the 2010 Health Care Act (Obamacare).

This tax will have a significant effect upon partners, LLC members and S-corporation shareholders, whose investment income is considered “passive.” Additional tax code provisions govern the definition of “passive” income, and it would be a good time to discuss whether you may be subject to such tax with your accountant, attorney and financial advisor.

If you have questions in this area, please don’t hesitate giving us a call at Schober Schober & Mitchell, S.C. , 262-785-1820 or 262-569-8300.