Could someone please answer this basic question?
Now lets say some one has only source of income via passive income like from stocks, dividends, capital gains (Net investment income). That person has NO Medicare tax until that person reaches 200/250/125 threshold.
Q. That is my question. Now if you reaches/crosses threshold, does only income above that threshold is subject to 3.8% tax or all of your income is now subject to 3.8% tax?
IRS website link about NIIT only talk about threshold and 3.8% tax but it is not clear to me if ONLY income above threshold or all of income is subject to 3.8% tax after reaching threshold.
