Investment and Finance
The most frequently asked tax questions related to Investment and Finance
401(k), 403(b), 457 and TSP plans - Maximum Contribution limits
Asked Wednesday, January 15, 2014 by an anonymous userCPA Answer:
The limit on employee elective deferrals is $18,000 for 2016.
The catch up contribution limit for employees 50 and over remains unchanged at $6,000.
Generally, all elective deferrals made to all plans in which you participate are aggregated to determine if you have exceeded these limits.
Generally, all elective deferrals made to all plans in which you participate are aggregated to determine if you have exceeded these limits.
Catch-up contribution
Asked Thursday, December 05, 2013 by an anonymous userCPA Answer:
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans is $6,000, In 2017, the total maximum contribution would be $18,000 plus $6,000 catch up = $24,000.
How will I report and pay the Net Investment Income Tax?
Asked Wednesday, August 21, 2013 by an anonymous userCPA Answer:
For individuals, the tax will be reported on, and paid with Form 8960 and on Form 1040.
For Estates and Trusts, the tax will be reported on, and paid with, the Form 1041.
For Estates and Trusts, the tax will be reported on, and paid with, the Form 1041.
When did the Net Investment Income Tax take effect ?
Asked Wednesday, August 21, 2013 by an anonymous userCPA Answer:
The Net Investment Income Tax went into effect on Jan. 1, 2013. The NIIT affects income tax returns of individuals, estates and trusts for their first tax year beginning on (or after) Jan. 1, 2013. It does not affect income tax returns for the 2012 taxable year filed in 2013.
What are some common types of income that are not Net Investment Income?
Asked Wednesday, August 21, 2013 by an anonymous userCPA Answer:
Wages, unemployment compensation; operating income from a nonpassive business, Social Security Benefits, alimony, tax-exempt interest, self-employment income and distributions from certain Qualified Plans.
What investment expenses are deductible in computing Net Investment Income?
Asked Wednesday, August 21, 2013 by an anonymous userCPA Answer:
In order to arrive at Net Investment Income, Gross Investment Income is reduced by deductions that are properly allocable to items of Gross Investment Income.
Examples of properly allocable deductions include investment interest expense, investment advisory and brokerage fees, expenses related to rental and royalty income, and state and local income taxes properly allocable to items included in Net Investment Income.
Examples of properly allocable deductions include investment interest expense, investment advisory and brokerage fees, expenses related to rental and royalty income, and state and local income taxes properly allocable to items included in Net Investment Income.
What kinds of gains are included in Net Investment Income?
Asked Wednesday, August 21, 2013 by an anonymous userCPA Answer:
To the extent that gains are not otherwise offset by capital losses, the following gains are common examples of items taken into account in computing Net Investment Income:
1.Gains from the sale of stocks, bonds, and mutual funds.
2.Capital gain distributions from mutual funds.
3.Gain from the sale of investment real estate (including gain from the sale of a second home that is not a primary residence).
Gains from the sale of interests in partnerships and S corporations (to the extent you were a passive owner).
1.Gains from the sale of stocks, bonds, and mutual funds.
2.Capital gain distributions from mutual funds.
3.Gain from the sale of investment real estate (including gain from the sale of a second home that is not a primary residence).
Gains from the sale of interests in partnerships and S corporations (to the extent you were a passive owner).
What is the Net Investment Income Tax ?
Asked Wednesday, August 21, 2013 by an anonymous userCPA Answer:
The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code (IRC). The NIIT applies at a rate of 3.8 percent to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.
What individuals are subject to the Net Investment Income Tax ?
Asked Wednesday, August 21, 2013 by an anonymous userCPA Answer:
Individuals will owe the tax if they have Net Investment Income and also have modified adjusted gross income over the following thresholds:
Married Filing jointly & Qualifying widow(er) $250,000
Single or Head of Household $200,000
Married filing separately $125,000
Married Filing jointly & Qualifying widow(er) $250,000
Single or Head of Household $200,000
Married filing separately $125,000