The surtax will depend on investment income or the amount by which Adjusted Gross Income is greater than the threshold, whichever amount is smaller.
Kiplinger's provides these examples:
- Couple earns $400,000 from salary plus $50,000 in investment income. The surtax would be 50,000*.038 = $1,900.
- Another couple earns $200,000 in salary plus $150,000 in investment income. The surtax would be 350,000 - 250,000 = 100,000 threshold, 100,000*.038 = $3,800.
Consideration of the surtax could be a tipping point for those considering a Roth conversion.
Source: 10/2012 Kiplinger's p. 11