Modified Adjusted Gross Income (MAGI) in the simplest terms is your Adjusted Gross Income (AGI) plus a few items — like exempt or excluded income and certain deductions. The IRS uses your MAGI to determine your eligibility for certain deductions, credits and retirement plans. MAGI can vary depending on the tax benefit.
What is the purpose of Form 8960?
The lessor of the amount that their modified adjusted gross income exceeds the threshold or their net investment income is $50,000….Form 8960 – Obamacare Tax implications for US Taxpayers in Canada.
| Filing Status | Threshold Amount |
|---|---|
| Married filing jointly | $250,000 |
| Married filing separately | $125,000 |
How is Form 8960 Line 9b calculated?
Line 9b is calculated from the state, local, and foreign income tax attributable to NII – generally Schedule A, line 7. * This amount is subject to limitation based on the ratio of Form 8960, line 8 divided by the AGI on Form 1040. By default, the program will deduct sales tax instead of income tax on the Wks SALT.
What do you need to know about form 8960?
About Form 8960, Net Investment Income Tax Individuals, Estates, and Trusts Taxpayers use this form to figure the amount of their net investment income tax (NIIT).
What is the modified adjusted gross income ( MAGI ) for form 8960?
The Modified Adjusted Gross Income (MAGI) threshold that applies to you is based on your filing status as shown below. For NIIT and IRS Form 8960, your MAGI is your Adjusted Gross Income (AGI) generally increased by the amount of foreign earned income you excluded.
Do you have to pay NIIT on form 8960?
However, if you do have investment income you could still be subject to the NIIT even if you are exempt from Medicare Taxes. Keep in mind, these amounts are not indexed for inflation. Essentially, IRS Form 8960 is used to help you figure out if the Net Income Investment Tax applies to you.
