Let's talk about the net investment income tax and how it can affect your retirement planning

in this, the 41st episode of the Retirement Planning Education Podcast.

Welcome to the Retirement Planning Education Podcast, where you can learn all about IRAs

and Roth IRAs, employer retirement plans, taxes, social security, Medicare, portfolio withdrawal

strategies, annuities, estate planning, and much more. And now here's your host, Andy Panko.

Hey, welcome back, everyone. Who wants to get real nerdy today? I know I do. Let's get into it.

Today is a specific one, a particular one, about the net investment income tax,

otherwise known as N-I-I-T, which I will call NIT. Again, net investment income tax. You may not have

heard of this. Many people haven't outside of tax return preparers, those in financial planning

or tax planning, unless you are pretty

hands-on and are one of the type of people who like to pick through and actually read the

entirety of your tax return, you probably don't even know this exists, even if it applies to you.

So what is it? It is an additional 3.8% flat tax applied on certain of your investment

income. This is a federal tax. This is not a state thing. This is I'm talking about federal

tax returns today. So again, some of your investment income may be subject to an additional

3.8% flat tax on top of what other,

whatever other tax may already be subject to, like regular income tax, or if you sell

a stock or a bond or a mutual fund in a brokerage account, might be subject to capital gains

tax rates. It could also be subject to this 3.8%

knit tax.

A little quick backstory.

So the net investment income tax started in January 1st, 2013.

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