The Patient Protection and Affordable Care Act (sometimes called “Obamacare”) comes with two new taxes for higher income taxpayers beginning on January 1, 2013: (i) a 3.8 percent Medicare contribution tax on net investment income (“Net Investment Income Tax”), and (ii) a 0.9 percent additional Medicare tax on wages and self-employment income. This Alert provides a general overview of these taxes and some of their potential impacts.

This new 3.8 percent tax will only affect taxpayers whose adjusted gross income (“AGI”) exceeds $250,000 for joint filers, $200,000 for single taxpayers and heads of household, and $125,000 for a married individuals filing separately. AGI consists of your gross income minus your adjustments to income.

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