how to calculate the nii tax
before you can calculate the nii tax you must determine the income you earned from every one of your qualified investments be sure you account for and subtract any fees and related expenses such as commissions and brokerage charges you can refer to the list of what counts in the table above next you ll need to get your magi this figure is your agi plus any excluded income and certain deductions like student loan payments see the table above for your tax filing status if you fall above any of those thresholds you will have to pay an nii tax if you can reduce your reported magi or net investment income you can also reduce your nii tax liability some ways to do that include contributing to retirement plans or charities or tax loss harvesting you can use internal revenue service irs form 8960 to determine what your tax liability is for net investment income or you can do so on your own 7 the 3 8 tax is imposed on your net investment income or the amount by which your magi exceeds the listed thresholds whichever is less here are two simple scenarios assuming you have an nii of 25 000 the net investment income tax is in addition to capital gains tax or dividends tax which the investor still has to pay 