Ep.#102: Net Investment Income Tax (NIIT)

In this episode of The Hawaii Retirement Show, Jason breaks down the Net Investment Income Tax, a 3.8 percent tax that applies to passive investment income for higher-income taxpayers. He explains when and why it was created, what types of income it covers, and how the income thresholds work, including why more people may be affected over time as incomes rise but the thresholds stay the same. Jason also walks through how the tax is calculated using the “lesser of” rule and gives simple examples to show how it works in practice. He closes with practical planning tips, noting that while the NIIT is not a major burden, it is important for investors and retirees to understand and factor into their tax planning, especially when dealing with capital gains, rental income, wage increases, or Roth conversions. Website: https://www.hiretirementshow.com Email Us: [email protected]