When the Affordable Care Act was passed in 2010, one provision was a new 3.8 percent Net Investment Tax effective in 2013. Although the tax will generally hit high-end taxpayers (threshold is $250,000 for married and $200,000 for single), because of the way many parents choose to report their children's investment income, the tax will likely hit many other children as well.
While the basic application of this tax has been known since passage, the specific effects have become more apparent recently as the IRS issued its final rules, forms, and instructions. Last Friday, the IRS published a tip on its website entitled "Tax Rules for Children with Investment Income." Included is this note regarding the Net Investment Tax [emphasis added]:
Starting in 2013, a child whose tax is figured on Form 8615 may be subject to the Net Investment Income Tax. NIIT is a 3.8% tax on the lesser of either net investment income or the excess of the child's modified adjusted gross income that is over a threshold amount...
The new tax paid on children's income will be part of a so-called "kiddie tax" that stems from 1980s tax reform when Congress sought to recover taxes that were being lost on income from assets transferred from parents to children ("child" is defined as under age 19, or under age 24 if a full-time student.) Investment income over $2,000 is taxed at the parents' highest rate instead of the rate used for regular income for the child. And if the parents' income exceeds the NIIT threshold, the child's investment income is also subject to the additional 3.8 percent tax.
The above scenario represents the simplest application of the regulations; individual situations can be more complex and will vary from person to person. But according to a tax accountant interviewed by THE WEEKLY STANDARD for this story, "The bottom line: you will get a lot of upper-middle-class taxpayers paying an additional NIIT if they have shifted enough income-producing assets to their children via gift." So while the tax was aimed at high-income taxpayers, it turns out Obamacare will hit some low age taxpayers as well.
A couple weeks ago the great Kay Hymowitz gave New York Times readers the vapors by writing a data-driven account of how single motherhood creates sub-optimal outcomes for both the mothers and their children. The piece was titled, "How Single Motherhood Hurts Kids."
In a statement marking the controversial Supreme Court ruling Roe v. Wade, President Obama says that "this is a country where everyone deserves the same freedom and opportunities to fulfill their dreams."
In Dakar, Senegal, speaking at the Martin Luther King Middle School, First Lady Michelle Obama likened her upbringing to the upbringing of the Senegalese children at the school. Obama told the children of her "experience," and how it was similar to theirs.
In terms of the “optics,” it doesn’t look good when you initiate a lawsuit against “Baby Girl.” But don’t let that fool you into thinking that the Capobianco family of South Carolina, who launched the lawsuit “Adoptive Couple versus Baby Girl,” and who won today at the Supreme Court, were in the wrong. They simply wanted to get their adoptive baby back. And after a three year legal battle, they have finally won.
The Boston Marathon bombings highlighted, once again, the challenges of assimilating Muslim youth. And while the onus of accountability ought not rest exclusively on Muslim Americans, it understandably weighs most heavily on them. Indeed, any fair-minded assessment of recent events must underscore the inadequacies of Muslim-American leaders. Yet the usual criticisms are wide of the mark and fail to identify the institutional as well as intellectual weaknesses of these leaders.
A new investigative video shows a Washington, D.C.-based abortion doctor admitting that if a baby is born alive in his clinic after a failed abortion attempt he would let the baby suffocate on fluid in the child's throat or lungs.
Late in the afternoon on New Year’s Eve, my wife Jill and I were driving through Vienna, Virginia, toward Tysons Corner when we found ourselves in front of, and then beside, and then right behind an old gray Volvo wagon. The car caught our eyes, and quickly we realized why, for it wasn’t just another car on the road but a car we’d once owned—from 1987, to be precise, when we bought it new, until December 2011. That’s not a misprint: The car was ours for more than 24 years.