MONARCH ACCOUNTING GROUP
  • Home
  • Solutions
    • CFO Services
    • Cloud ACCOUNTING
    • Bookkeeping Services
    • QuickBooks Training
    • Income Taxes
    • Other Services
  • Resources
    • Tax Rates
    • SmartVault
    • Tax Tips
    • Tax Organizer
    • Record Retention Schedule
  • Reviews
  • Meet Us
  • Blog
  • Contact Us

Ways To Minimize Net Investment Income (NII) Tax

5/28/2019

0 Comments

 

The new tax legislation enacted late in 2017 rewrites large sections of the tax code. However, one key provision for investors has remained in place: the tax on net investment income (NII). Although it's still on the books, you can minimize the impact for this year with some timely tax action.
​
 
NII tax background
 
Generally, the NII tax is equal to 3.8 percent of the lesser of your NII or excess modified adjusted gross income (MAGI) over an annual threshold of $200,000 for single filers ($250,000 for joint filers).
 
NII includes most investment income items like interest and dividends, capital gains and gains from investments in passive activities. But certain other items - such as distributions from IRAs and qualified retirement plans and income from an active business - are specifically excluded from this calculation.
 
How to reduce NII tax
 
Even if the tax applies in your situation, you may minimize the tax damage by reducing NII, MAGI or both. Consider these ideas:
  • Increase contributions to qualified retirement plans like a 401(k).
  • Harvest capital losses to offset high-taxed capital gains.
  • Postpone large capital gains to a future year.
  • Invest in municipal bonds ("munis") or muni bond funds that produce tax-free income.
  • Switch from dividend-paying stocks to growth stocks you can hold until you're in a low tax year.
  • Set up a charitable remainder trust (CRT) that provides an income stream with tax benefits.
  • Arrange a tax-free like-kind exchange of real estate instead of realizing a large capital gain.
  • Sell real estate on the installment basis.
  • Shift high-taxed income to family members in lower tax brackets.

​Of course, other financial factors may affect these strategies. Call today for help developing a plan that suits your needs.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    BLOG

    To better serve our clients and friends, to keep you up-to-date and informed, our blog is a resource for tax tips and overall accounting related articles. We hope you find this useful!


    CATEGORIES​

    All
    Business Owners: Must Know
    IRS Tax Tip
    Monthly Newsletter
    Tax Return: Must Know
    Tax Tip Of The Week


    ARCHIVES

    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015

    RSS Feed

Picture
Picture
Picture
Picture
Phone: (630) 320-3720

Monarch Accounting Group Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527-7836
Email: Info@MonarchAccountingGroup.com


Picture
Picture
Picture
Picture
Picture
Picture
Picture
Picture
  • Home
  • Solutions
    • CFO Services
    • Cloud ACCOUNTING
    • Bookkeeping Services
    • QuickBooks Training
    • Income Taxes
    • Other Services
  • Resources
    • Tax Rates
    • SmartVault
    • Tax Tips
    • Tax Organizer
    • Record Retention Schedule
  • Reviews
  • Meet Us
  • Blog
  • Contact Us