15% Taxpayers in the 15% 25%, 28%, 33%, and 35% brackets 20% Taxpayers in the 39.6% bracket 20% Note: Because of the 3.8% Medicare surtax (discussed immediately following), the effective capital gains rates for taxpayers can reach up to 23.8% for taxpayers in the 39.6% bracket and 18.8% for taxpayers in lower brackets. 2016 MEDICARE SURTAX Note: A 3.8% surtax applies to the lesser of net investment income or modified adjusted gross income in excess of the following threshold amounts (dependent upon filing status): 2015 Filing Status 2016 Married individuals filing jointly $250,000 $250,000 Married filing separately $125,000 $125,000 Individual taxpayers $200,000 $200,000 2016 KIDDIE TAX Note: The who tend to be in a lower tax bracket, into their “kiddie tax” brings children, parents’ respective tax brackets for a portion of their unearned income. Net Unearned Income 2015 2016 Net unearned income subject to the kiddie tax equals unearned $2,100 $2,100 income minus the greater of or this amount, The plus $1,050 $1,050 child’s itemized deductions (if applicable) this amount. Eligibility for Parental Election For parents to elect to include the income on their return, the child’s gross income from interest and dividends must exceed $1,050 $1,050 this child’s and amount; Be less than $10,500 $10,500 this amount. Impact of Parental Election Parents who elect to include the income on their return must child’s include in their gross income the gross income minus $2,100 $2,100 this child’s and amount; Must add to their tax the lesser of or $105 $105 this amount; 10% of the excess of the gross income over $1,050 $1,050 this amount. child’s
Taxpayers in the 25%, 28%, 33%, and 35% brackets 15% 15% Taxpayers in the 39.6% bracket 20% 20% Note: Because of the 3.8% Medicare surtax (discussed immediately following), the effective capital gains rates for taxpayers can reach up to 23.8% for taxpayers in the 39.6% bracket and 18.8% for taxpayers in lower brackets. 2016 MEDICARE SURTAX Note: A 3.8% surtax applies to the lesser of net investment income or modified adjusted gross income in excess of the following threshold amounts (dependent upon filing status): Filing Status 2015 2016 Married individuals filing jointly $250,000 $250,000 Married filing separately $125,000 $125,000 Individual taxpayers $200,000 $200,000 2016 KIDDIE TAX Note: The “kiddie tax” brings children, who tend to be in a lower tax bracket, into their parents’ respective tax brackets for a portion of their unearned income. Net Unearned Income 2015 2016 Net unearned income subject to the kiddie tax equals unearned income minus the greater of this amount, or $2,100 $2,100 The child’s itemized deductions (if applicable) plus this amount. $1,050 $1,050 Eligibility for Parental Election For parents to elect to include the child’s income on their return, the child’s gross income from interest and dividends must exceed this amount; and $1,050 $1,050 Be less than this amount. $10,500 $10,500 Impact of Parental Election Parents who elect to include the child’s income on their return must include in their gross income the child’s gross income minus this amount; and $2,100 $2,100 Must add to their tax the lesser of this amount; or $105 $105 10% of the excess of the child’s gross income over this amount. $1,050 $1,050