Is there an extra "penalty" if filing forms 8959 and 8960?

[mellynlee]

Just wondering if we are paying an "extra penalty" if we need to file forms 8959 and 8960? TT fills this out for us because our income is above the threshold, and so we owe additional medicare tax and additional investment income tax.

Is this something we can avoid or is it just something we need to pay if our income is above threshold?

[MinhT1 · Accepted solution]

You can't avoid paying the NIIT on Form 8960 if you have investment income (interest, dividends, rental income, capital gains) and your Modified AGI is above a certain level for your filing status. See this IRS document.

Likewise, you can't avoid paying the Additional Medicare tax on Form 8959 if your income is above a certain level for your filing status. See this IRS document.

There's no extra penalty for filing these forms.