how to manage the nii tax
even if you earn significant investment income you can reduce your tax liabilities by taking steps that reduce your reported adjusted gross income agi your net investment income or both one way to reduce your agi is to maximize your contributions to iras and other qualified retirement plans or by participating in deferred compensation plans if you can reduce your agi so that it does not exceed the threshold above you may not need to pay nii tax at all you can also reduce your net investment income through tax loss harvesting by selling unprofitable investments at the same time as profitable ones you can reduce your net investment income and thereby reduce your tax burden it is also possible to reduce nii through charitable contributions such as a charitable remainder trust 