Net Investment Income Tax Calculator
Calculate 3.8% NIIT (Net Investment Income Tax) on capital gains, dividends, interest, and rental income.
Income Details
MAGI = AGI + foreign income adjustments (simplified here as AGI)
State income taxes, investment fees (limited deduction)
Threshold Analysis
NIIT Threshold (single)$$200000
Your MAGI$$200000.00
MAGI Over Threshold$$0.00
Investment Income Breakdown
Capital Gains$$30000.00
Dividends$$10000.00
Interest$$5000.00
Rental Income$$5000.00
Total Investment Income$$50000.00
Net Investment Income$$50000.00
NIIT Calculation
Tax Base = Lesser of:
1. Net Investment Income$$50000.00
2. MAGI over Threshold$$0.00
Amount Subject to NIIT$$0.00
NIIT Rate3.8%
NIIT Amount$$0.00
No NIIT - Below Threshold
MAGI ($$200000.00) below $$200000 threshold. No 3.8% NIIT applies. You still owe regular income tax on investment income. Monitor income to avoid crossing threshold in future years.
Total Additional Taxes
NIIT (3.8%)
$$0.00
Add. Medicare (0.9%)
$$0.00
Total Additional Tax
$$0.00
Income Subject to NIIT
Taxable:
Capital gains (long/short)
Dividends (qualified/non-qualified)
Interest (taxable)
Rental/passive income
Royalties
Passive business income
Exempt:
Municipal bond interest
Social Security
IRA/401k distributions
Earned income (wages)
Active business income
Life insurance proceeds
NIIT Avoidance Strategies
Tax-loss harvesting: Offset gains with losses. Municipal bonds: Tax-exempt interest. Roth conversions: Reduce future MAGI. Charitable donations: Reduce MAGI below threshold. Increase retirement contributions: Lower MAGI. Passive to active: Convert passive business to active (material participation). Timing income: Spread gains across years.
NIIT vs Medicare Tax
NIIT (3.8%): Investment income (gains, dividends, interest, rental, passive). Additional Medicare (0.9%): Earned income (wages, self-employment) over threshold. Both use same thresholds ($200K single, $250K married). Can apply simultaneously on different income types. Total max: 4.7% additional on combined income.
Key Points
NIIT enacted 2013 (Obamacare). Applies above threshold regardless of age. No phase-out - full 3.8% applies immediately. Cannot be offset by standard/itemized deductions. Consider in retirement planning: Roth conversions reduce future MAGI. State income taxes deductible from investment income (reduces NIIT base).