Next Year’s New Medicare Tax Provides Another Incentive to form an S Corporation Investors often use S corporations to minimize self-employment and Medicare taxes. Next year’s new 3.8% tax on net investment income provides another incentive to form an S corporation. Thomas Wechter, JD, discusses in this article at The Tax Insider the new rules that take effect in 2013.
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Two New Taxes on Net Investment Income and Medicare Will Take Effect on January First At the Wall Street Journal’s Tax Report, Laura Saunders explains. The word is out: Two new taxes on the affluent and wealthy will take effect as scheduled next year as a result of the Supreme Court’s decision upholding the health-care overhaul. One is a new 3.8% tax on net investment income, and the other is a 0.9% increase in the Medicare tax on wages and self-employment income. Both levies apply to joint filers with adjusted gross incomes above $250,000 ($200,000 for singles). A recent…