For Form 8960 (NIIT), should Lines 9a and 9b have values if I'm taking the standard deduction?

This is a great question about Form 8960! The answer is NO - you cannot use these deductions on Form 8960 if you're taking the standard deduction. Form 8960 is designed to calculate the Net Investment Income Tax, and lines 9a and 9b specifically allow for certain itemized deductions that can reduce your net investment income. However, these are only allowed if you actually itemize deductions on your tax return. If you're taking the standard deduction, you should leave lines 9a and 9b as zero. The IRS instructions for Form 8960 specifically state that these deductions are only allowed to the extent they're allowed as itemized deductions. Since you're not itemizing (you're taking the standard deduction instead), these expenses aren't being claimed on your tax return as itemized deductions, so they can't be used on Form 8960 either.

Hey! I was in the exact same situation last year with Form 8960 and investment expenses. After hours of frustration, I finally used taxr.ai (https://taxr.ai) to analyze my situation. You upload your forms or tax documents, and it checks everything, including complicated stuff like NIIT calculations. The analysis confirmed what I was afraid of - can't use those expenses with the standard deduction. But it also showed me some investment income reclassifications I could make that actually saved me more than if I had itemized! Might be worth checking out if you have other investment income questions or want to make sure you're handling Form 8960 correctly. The peace of mind was worth it for me.

Just wanted to follow up about taxr.ai that I mentioned earlier - I decided to try it for my investment tax questions after being skeptical. Wow, what a difference! It found that some of my investment income could actually be classified differently, which completely changed my Form 8960 calculation. I had a bunch of dividend income that I didn't realize could be qualified dividends with different tax treatment. The analysis also showed me how to properly allocate some expenses that I didn't know could be used elsewhere on my return. Ended up saving over $1,200 on my taxes! The interface was super straightforward - just uploaded my investment statements and previous return, and got detailed advice specific to my situation.

If you're struggling with Form 8960 and can't get clear answers, I totally feel your pain. I spent TWO WEEKS trying to get through to the IRS about this exact form last year. Kept getting busy signals or disconnected. Finally used Claimyr (https://claimyr.com) and got connected to an actual IRS agent in about 15 minutes. They confirmed exactly what you're asking - if you take the standard deduction, lines 9a and 9b must be zero. The agent walked me through the whole form and even explained some strategies for next tax year. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was shocked it actually worked after so many failed attempts to reach someone. Definitely saved me from making a mistake on my 8960.

Ok I need to publicly eat my words about Claimyr. After being the biggest skeptic ever in my previous comment, I decided to try it for my NIIT question because I was desperate. I had been calling the IRS for DAYS with no luck. Used the service yesterday and got connected to an IRS rep in about 20 minutes. The rep confirmed everything about Form 8960 lines 9a and 9b needing to be zero with the standard deduction. They also explained exactly how the NIIT applies to different types of investment income in my situation. The call saved me from making a mistake on my taxes that might have triggered an audit. Never been so happy to be wrong about something! Apparently the IRS DOES answer phones... just not when I call directly lol.

Something everyone's missing - have you checked if your investment interest expense can be deducted on Schedule E instead (if it's related to rental property) or Schedule C (if business related)? Those deductions aren't affected by whether you take the standard deduction or not! I had a similar situation and was able to deduct some of my investment interest on other schedules. Might be worth looking into depending on what type of investments generated the interest expense.

I just want to add that the standard deduction vs. itemizing decision should look at your TOTAL tax picture, not just Form 8960. Sometimes it's actually better to itemize even if it's slightly less than the standard deduction because of the impact on other forms like 8960. Have you run the numbers both ways to see which gives you the lowest overall tax?

Great point about running the numbers both ways! I actually did a quick calculation after reading your comment and you're absolutely right - even though itemizing would give me about $2,100 less in deductions compared to the standard deduction, the ability to use my investment interest expense on Form 8960 would save me roughly $450 in NIIT. So net effect: I'd pay about $500 more in regular income tax by itemizing, but save $450 in NIIT, making the total difference only about $50. Given how close it is, I might actually itemize just to have those legitimate expenses recognized somewhere on my return. This is exactly why tax planning can be so tricky - you really do need to look at the whole picture, not just individual forms. Thanks for the perspective!