The Internal Revenue Service has posted a final version of the form for computing the 3.8 percent Net Investment Income Tax that was mandated as part of the Affordable Care Act.
Form 8960 is used for calculating the Net Investment Income Tax, which 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. The tax went into effect on Jan. 1, 2013.
For married filing jointly returns, the threshold amount is $250,000. For married filing separately returns, it is $125,000. For single taxpayers, it is $200,00, as it also is for a head of household with a qualifying person. For a qualifying widow or widower with a dependent child, the threshold is $250,000.
The form includes a section for calculating the net investment income from sources such as taxable interest, ordinary dividends, annuities, rental real estate, royalties, partnerships, S corporations and trusts. Another section allows taxpayers to figure in investment expenses such as state income taxes.
The IRS also recently released a draft version of the instructions for filling out the form (see IRS Previews Instructions for Net Investment Income Tax Form).