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Devon Littlefield
Financial Advisor
Reliant Investment Services
Located at
Reliant Community Federal Credit Union
10 Benton Place, Sodus, NY 14551
Phone: 800-724-7889 Opt. 1
Email: devon.littlefield@lpl.com
July/August 2025
Net Investment Income Tax and Who Pays It
The net investment income tax (NIIT) affects individuals, estates, and trusts with significant investment income. In its first year (2013), about three million taxpayers were subject to the additional 3.8% net investment income tax (NIIT) in 2013. Since then, the number of affected taxpayers have more than doubled, underscoring the growing relevance of this tax.
What Qualifies as Net Investment Income (NII)
This income includes interest, dividends, capital gains, rental income, and passive income from business interests. When your modified adjusted gross income (MAGI) exceeds $200,000 for single filers or $250,000 for married couples filing jointly, the 3.8% tax kicks in on your net investment income. The tax is paid in addition to any capital gains tax.Mitigating the Impact
Consider maximizing contributions to tax- deferred accounts like IRAs or 401(k)s to lower your MAGI in the current tax year. Try tax-loss harvesting. This technique involves selling underperforming investments at a loss to offset taxable gains. Strategic selling can lower your overall capital gains and your net investment income. If you're close to the threshold income, consider deferring income to a future year or bunching deductions to keep your MAGI below the tax limits for the current year.Consulting a tax professional who understands the complexities of high-net- worth individuals can help you develop a tax strategy tailored to your financial situation.
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Devon Littlefield is a financial advisor with, and securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Reliant Community Federal Credit Union and Reliant Investment Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Reliant Investment Services, and may also be employees of Reliant Community Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Reliant Community Federal Credit Union or Reliant Investment Services. Securities and insurance offered through LPL or its affiliates are:
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