So you'd end up paying 1.45% on the first $200,000 and 2.35% on the rest. The 0.9% Medicare surtax is a recent change and is intended to help pay for health reform. Investment income taxes: Capital gains, dividends and interest represent unearned income..
The tuition and fees deduction sounds good on the surface; it offers up to a $4,000 deduction. This option is open even if you donât itemize deductions. But since the deduction is for the taxpayer, not the student, it may not be the most beneficial for taxpayers with more than one student in the family.
A letter from the schools stated that an estimated 55% of their tuition was for religious education and 45% for secular education. The taxpayers accordingly deducted $13,240 on their 1994 income tax return. The IRS sent a notice of deficiency disallowing the deduction.