Beware of the NIIT This Year

If you had a good year with your investments in 2024 you might be coming face-to-face with the NIIT when you file your FIT return this year!

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When this was implemented under the ACA the qualifying thresholds were made constant, i.e. not indexed to inflation. How nice of the ACA to do that to investors.

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I believe the best way to get back at Democrats,is to invest in stocks that appreciate and don’t pay dividends.Warren Buffet has this figured out,as his investment in Berkshire Hathaway pays no dividend and has appreciated over 8% a year for many years.I guess this is why very greedy Democrats,like Elizabeth Warren,want to tax appreciated assets.

They did that to Social Security also… the amount subject to taxation never was indexed, which is why it’s important to either index it properly or stop taxing Social Security. I’ll take either solution.

Also, you can only carryforward $3000 in losses that was never indexed. Eventually, $3000 will buy you one Starbucks coffee. Well, in 99 years at 5% inflation. But that $3000 carryforward has sure shrunk in real terms.

Is AMT stil not indexed?

The amount earned subject to social security tax has been increasing pretty rapidly each year. You can pull up the history online. Unless I’m misunderstanding what you wrote.

The dollar tiers were not indexed so the actual bite gets worse every year. $34000 then is $105000 now

We are talking about two different things. I was referring to the amount of income subject to SS.

For 2025 it’s $176,100. In 2015 it was $118,500. It has been increased pretty dramatically.

Oh ok. Yeah. … they inflate what they take from payroll but they allow inflation to bust through the taxation brackets on the other end, when you take your benefit. It’s pretty shameful. There’s lots of this unindexed nonsense in the tax code

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Hindsight is 20/20.

For a system designed by politicians it ain’t bad.

And it serves the purpose of giving the people something to complain about, and it could be worse.

That’s a pretty low bar to shoot for. Most will be able to make it. :disappointed:

It’s part of our country’s economic machine, and that machine is better than any other on this planet. That’s not to say it’s perfect, because we live in a democratic republic, it’s a construct of compromise.

As long as we’re better than anywhere else in our economic machine is also easily achievable by settling for mediocrity. It is in large part the reason we have 36T in debt.

We live in a representative republic not a democratic republic.

I’ll settle for constitutional republic.

But the fact WE have a 36T dollar debt is the fault of the voters, WE elected every one of the guys who ran up that debt.

And WE have to fix it. :slightly_smiling_face:

The percentages really tell the story. Don’t tell Trump that he was worse than Biden Carter. He’ll ban this community.

Honestly, I think we’re riding the tiger. Can’t stay on, can’t get off. We’re going to end in some kind of default, either outright, or just in real terms (pay off the debts but in highly devalued currency). Then there will be a true global crisis, but out of it will come a new economic order, but the world won’t be unipolar led by the USA any longer. The American Century will be over on the 100th anniversary of D-Day, give or take a few years.

Gold, you have to have it. Maybe bitcoin, if it survives the next bust and proves its worth as a safe-ish haven.

I believe that if we can reduce the debt to below our GDP and hold it there we can maintain the dollar’s postion as the global standard.

Running zero debt is not doable nor is it practical.

Oh yes, zero debt is not possible nor necessary. But there is a debt-to-GDP ratio beyond which history shows nations can’t escape… like a black hole or whirlpool, it sucks them in. But when do we cross that event horizon? Not easy to know, but I bet 5-10 years after we cross it, we’ll look back and say, “Oh ****”.

Debt-to-GDP Ratio: How High Is Too High? It Depends | St. Louis Fed