Final answer:
A married couple with a combined active and net investment income of $420,000 would pay a Medicare surtax of $6,460 on the $170,000 that exceeds the $250,000 threshold for married filing jointly, as the surtax applies to the lesser of net investment income or MAGI above the threshold at a rate of 3.8%.
Step-by-step explanation:
The question involves calculating Medicare surtax obligations for a married couple filing jointly with both active and investment income. The Medicare surtax, also known as the Net Investment Income Tax (NIIT), is imposed on the lesser of net investment income or the excess of modified adjusted gross income (MAGI) over the threshold amount. The threshold for married couples filing jointly is $250,000. To determine the Medicare surtax obligation, one must calculate the couple's modified adjusted gross income (MAGI) by adding their active income ($220,000) to their net investment income ($200,000), yielding a MAGI of $420,000.
Since their MAGI exceeds the $250,000 threshold, the couple would apply the surtax of 3.8% to the lesser of their net investment income or the amount by which their MAGI exceeds the threshold. The excess is $170,000 ($420,000 - $250,000), which is less than their net investment income ($200,000). The surtax is therefore calculated on $170,000, which amounts to a surtax obligation of $6,460 ($170,000 x 3.8%).
Making sure to consider the updated threshold amounts and rates for the year in question is important, as these figures can change with new tax legislation or adjustments for inflation.