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I have a question regarding Form 8960 - Net Investment Income Tax.

Level 1

Re:  Form 8960 Calculations

My client has 2022 income from W-2 wages, social security benefits, capital gains and a pension.  Client's investment income is less than $20k.  Client's modified AGI exceeds $250,000 threshold (for married filing jointly) causing a net investment income tax of $183. 

ProSeries software is including the W-2 wages and social security benefits in the calculation for modified AGI used to further calculate the net investment tax.  If these income items were excluded from the modified AGI calculation, client would not meet the $250,000 threshold and therefore not owe any net investment income tax.  Should these income items be excluded from the modified AGI calculation when calculating net investment income tax?  The IRS Form 8960 instructions seem to indicate that wages and social security benefits are excluded income.  Thanks.

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1 Comment 1
Level 15

I think you are misreading the instructions. Wages and SS are excluded from Net Investment Income Tax. They are not excluded from the AGI used to calculate the tax.