But gifting a home also can result in a big, unnecessary tax bill and put your house at risk if your kids get sued or file for bankruptcy. Married taxpayers filing jointly must have an AGI over $250,000 to be subject to the tax. Help us send the best of Considerable to you. The average Alzheimer’s patient is not "Still Alice,” the 50-something linguistics expert from the Academy Award-winning movie who faces a devastating diagnosis of early-onset Alzheimer's disease. Also, is the surcharge in effect for two years until the tax cycle returns you to your lower income? Steve – Florida: Social Security is taking too much out for Medicare in 2019. I am not a tax expert, but I believe people have a one-time exemption that permits them to sell their principal residence without adverse tax consequences. The lag is related to how long it takes Social Security to receive complete tax-return records from the IRS. Increased charges will result if your modified adjusted gross income exceeds $170,000 in a given year, assuming you are married. The tax applies only to investment income. Since $300,000 is less than $350,000, they’ll have to pay the 3.8% tax on $300,000. The coverage you need. But does it make any difference if you immediately put all or part of that income into the purchase of another home? The tax is paid on the lesser of (1) the taxpayer’s net investment income, or (2) the amount the taxpayer’s AGI exceeds the applicable AGI threshold ($200,000 or $250,000). Expert Philip Moeller answers your questions about health, aging, and retirement. This includes: This includes just about any income not derived from an active business or from employee compensation. I also sold real estate in 2018, putting me in the same MAGI range. If their income declined in 2020, the surcharge would disappear in 2022. Currently, I am on Obamacare, and it is working fine for me. If a person sells or transfers his home to a third party to hide assets and avoid this disqualification, Medicaid usually uses what’s called a “look back” period of five years to judge whether such a sale will affect Medicaid eligibility. We won't even ask for your phone number. After creating a password, please click the link below to login. For example, someone with high income in 2019 would see this reflected on their tax return filed in 2020 and would pay the surcharge during 2021. Getting a grip on your health is easier than you think. Together they earn $200,000 in wages. The tax applies only to people with relatively high incomes. How long can I wait to enroll before there is a penalty? People with life-changing events can get same-year relief from the surcharge, with the most common event being retirement and the loss of wage income. It's that simple, we won't try to sell you anything. This looks like the beginning of a beautiful friendship. Adding an adult child to your house deed might seem like a smart thing to do. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Also, the high-income surcharge lasts only for one year. Example: Phil and Penny are a married couple who file a joint return. Password must be at least 8 characters, including uppercase, lowercase, and a number.