IRS 8960 2024-2025 free printable template

Form8960Department of the Treasury Internal Revenue ServiceNet Investment Income Tax Individuals, Estates, and TrustsOMB No. 154522272024Attach to your tax return. Go to www.irs.gov/Form8960 for instructions

How to fill out 8960 form

How to fill out IRS 8960

1. Gather necessary financial documents, including forms 1040, 1040-SR, and any applicable schedules.
2. Calculate your modified adjusted gross income (MAGI) for the tax year.
3. Determine if your MAGI exceeds the threshold for the Net Investment Income Tax ($200,000 for individuals, $250,000 for married filing jointly).
4. Report income from investments such as interest, dividends, capital gains, and rental income in Part I of Form 8960.
5. Identify and report any deductions or losses from the investments in Part II of Form 8960.
6. Calculate the net investment income by subtracting deductions from total investment income.
7. Complete Part III to compute the Net Investment Income Tax based on the calculated net investment income.
8. Transfer the calculated tax to your Form 1040.

Who needs IRS 8960?

1. Individuals with a modified adjusted gross income (MAGI) exceeding the threshold amounts.
2. People who have investment income which may include interest, dividends, capital gains, or rental income.
3. Married couples filing jointly if their combined MAGI exceeds $250,000.

People Also Ask about 8960

Can I deduct state income taxes on form 8960?

The total of the state, local, and foreign income taxes that you paid for the current tax year is entered on line 9b of form 8960. Enter only the tax amount that is attributed to the net investment income. Do not include sales tax or any foreign income taxes paid for which you took a credit.

What is 8960 for?

Taxpayers use this form to figure the amount of their net investment income tax (NIIT).

How is Form 8960 calculated?

If your net investment income is $1 or more, Form 8960 helps you calculate the NIIT you might owe by multiplying the amount by which your MAGI exceeds the applicable threshold or your net investment income—whichever is the smaller figure—by 3.8 percent.

Can you deduct brokerage fees on Form 8960?

For instance, brokerage fees that are not properly allocable will not be allowed as a deduction. The instructions to Form 8960 provides examples of deductions that are not deductible for NII purposes. For example, deductions for contributions to IRAs or other qualified plans.

Do I need a 8960?

If you earn income from any of your investments this year, you may have to pay the net investment income tax, in addition to the regular income taxes you owe. You won't know for sure until you fill out Form 8960 to calculate your total net investment income.

Does 3.8% net investment income tax apply?

If you have investment income and go over the MAGI threshold, the 3.8% tax will apply to your net investment income or the portion of your MAGI that goes over the threshold—whichever is less.

How do you avoid net investment income tax?

If we can increase investment expenses to lower our net income, that is another way to avoid the Net Investment Income Tax. Examples of expenses are rental property expenses, investment trade fees, and state and local taxes.

What is tax form 8960 used for?

Attach Form 8960 to your return if your modified adjusted gross income (MAGI) is greater than the applicable threshold amount. Use Form 8960 to figure the amount of your Net Investment Income Tax (NIIT).

Who needs to file form 8960?

If you earn income from any of your investments this year, you may have to pay the net investment income tax, in addition to the regular income taxes you owe. You won't know for sure until you fill out Form 8960 to calculate your total net investment income.

Who pays 3.8 net investment tax?

The net investment income tax is a 3.8% tax on investment income that typically applies only to high-income taxpayers. 1 It applies to individuals, families, estates, and trusts, but certain income thresholds must be met before the tax takes effect. Net investment income can be capital gains, interest, or dividends.

Who is subject to NIIT?

A 3.8 percent Net Investment Income Tax (NIIT) applies to individuals, estates, and trusts that have net investment income above applicable threshold amounts.

What is excluded from net investment income tax?

Net investment income generally does not include wages, unemployment compensation, Social Security Benefits, alimony, and most self-employment income. Additionally, net investment income does not include any gain on the sale of a personal residence that is excluded from gross income for regular income tax purposes.

Who pays 3.8 net investment tax?

Your net investment income is less than your MAGI overage. Let's say you have $30,000 in net investment income and your MAGI goes over the threshold by $50,000. You'll owe the 3.8% tax.

Who fills out 8960?

IRS Form 8960 Applies If The Following Are True… You have investment income. Your Modified Adjusted Gross Income (MAGI) is above the threshold outlined below.

Who is subject to net investment income?

3. What individuals are subject to the Net Investment Income Tax? Filing StatusThreshold AmountMarried filing jointly$250,000Married filing separately$125,000Single$200,000Head of household (with qualifying person)$200,0001 more row

Do I have to pay net investment income tax?

As an investor, you may owe an additional 3.8% tax called net investment income tax (NIIT). But you'll only owe it if you have investment income and your modified adjusted gross income (MAGI) goes over a certain amount. As an investor, you may owe an additional 3.8% tax called net investment income tax (NIIT).

What is the 3.8% tax called?

Effective Jan. 1, 2013, individual taxpayers are liable for a 3.8 percent Net Investment Income Tax on the lesser of their net investment income, or the amount by which their modified adjusted gross income exceeds the statutory threshold amount based on their filing status.

Who must pay net investment income tax?

As an investor, you may owe an additional 3.8% tax called net investment income tax (NIIT). But you'll only owe it if you have investment income and your modified adjusted gross income (MAGI) goes over a certain amount.

What income is subject to NIIT?

Not everyone will need to pay the NIIT, and only those who fall above certain income thresholds will be subject to it. The IRS statutory income thresholds are as follows: Married filing jointly — $250,000. Married filing separately — $125,000.

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What is IRS 8960?

IRS Form 8960 is used to calculate the Net Investment Income Tax (NIIT), which is additional tax on certain investment income.

Who is required to file IRS 8960?

Individuals, estates, and trusts that have net investment income and modified adjusted gross income above specified thresholds are required to file IRS Form 8960.

How to fill out IRS 8960?

To fill out IRS Form 8960, gather information on your net investment income and modified adjusted gross income, complete the relevant sections for calculations, and ensure accuracy before submission.

What is the purpose of IRS 8960?

The purpose of IRS Form 8960 is to facilitate the calculation and reporting of the Net Investment Income Tax owed by taxpayers.

What information must be reported on IRS 8960?

IRS Form 8960 requires reporting of net investment income, modified adjusted gross income, and the applicable thresholds for the Net Investment Income Tax.