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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

Know the rules for new health care investment surtax

By Kimberly Lankford






Q: I understand that the health care reform law imposes a new tax on investments. To whom does the tax apply, and when does it take effect?

A: Starting this year, taxpayers who have a modified adjusted gross income of $200,000 or more ($250,000 for joint filers) will pay a 3.8 percent surtax on certain kinds of investment income, such as interest, dividends, capital gains, rent and royalties. (Interest on tax-exempt municipal bonds doesn't count.)

The calculation is tricky; the surtax applies either to the investment income or to the amount of modified AGI exceeding the threshold, whichever is less. For example, if your joint income is $300,000 and you have $5,000 of investment income, you'll pay the tax on the $5,000. But if your investment income is $50,000 and your joint modified AGI is $260,000, you'll pay the tax on $10,000 of the investment income.

There's also a 0.9 percent Medicare surtax on any salary or self-employment income that exceeds the modified AGI threshold.


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Q: Does this new tax apply to home sales?

A: It does apply to home-sale profits, but it might not hit very many people. When you sell your home, up to $250,000 of the profit is tax-free if you're single and have owned and lived in the home for at least two of the five years leading up to the sale; the exclusion rises to $500,000 for married couples filing a joint return. That part of the profit is not subject to capital-gains taxes, and it also avoids the new 3.8 percent surtax. So a married couple who bought a home more than two years ago for $300,000 (and has lived in it since then) can sell it for up to $800,000 without having to pay taxes on the sale -- no matter how high their income.

If your profit on the home sale is more than the tax-free amount, or if you lived in the house for less than two out of the past five years, your investment profit will be subject to this extra tax if your modified AGI is more than $200,000 if you're single and $250,000 if you're married filing jointly. The tax exclusion does not apply to second homes or vacation homes, so the entire profit on the sale of a second home or vacation home could be subject to the surtax. For more information, see New Tax on Windfall Home-Sale Profits.

Q: What can I do to minimize the new tax?

A: Any steps you can take to keep your income below the $200,000/$250,000 modified AGI threshold in 2013 -- such as contributing to a 401(k) or flexible spending account -- can help you avoid the tax. Also consider buying investments that aren't subject to the surtax, such as tax-exempt municipal bonds. See Plan for New Tax on Investment Income for strategies to help minimize the tax bite.

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Kimberly Lankford is a Contributing Editor at Kiplinger's Personal Finance.



All contents copyright 2013 The Kiplinger Washington Editors, Inc. Distributed by Tribune Media Services. All rights reserved.

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