Did you know there’s a 3.8% tax that can quietly apply to your investment income?
It’s called the Net Investment Income Tax (NIIT), and it affects interest, dividends, capital gains, and passive income once your total income crosses:
• $200,000 (Single)
• $250,000 (Married Filing Jointly)
Here’s how it works:
– It applies to the lesser of your investment income or the amount over the threshold.
– Example: $75K of investment income on $320K total income → 3.8% on $70K = $2,660 owed.
– Even “non-investment” income – like Roth conversions – can push you into NIIT territory.
Strategic timing, harvesting losses, and charitable giving can all help minimize exposure. At Liberty One Wealth Advisors, we help clients build smarter portfolios with after-tax results in mind – not just before-tax returns.
