McAtee & Associates, CPAS
Some taxpayers may be required to pay an Additional Medicare Tax if their income exceeds certain limits. Here are some things that you should know about this tax…
What You Need to Know About the Additional Medicare Tax
1. Tax Rate. The Additional Medicare Tax rate is 0.9 percent.
2. Income Subject to Tax. The tax applies to the amount of certain income that is more than a threshold amount. The types of income include your Medicare wages, self-employment income, and railroad retirement (RRTA) compensation. If you’re not sure if you have income subject to these rules, please give us a call for assistance.
3. Threshold Amount. You base your threshold amount on your filing status. If you are married and file a joint return, you must combine your spouse’s wages, compensation or self-employment income with yours. The combined total will determine if your income exceeds your threshold. The threshold amounts are:
- Married filing jointly: $250,000
- Married filing separately: $125,000
- Single: $200,000
- Head of household: $200,000
3. Withholding/Estimated Tax. Employers must withhold this tax from your wages or compensation when they pay you more than $200,000 in a calendar year. If you are self-employed, this tax must be included when your estimated tax liability is figured.
4. Underpayment of Estimated Tax. If you have too little tax withheld, or do not pay enough estimated tax, you may owe an estimated tax penalty.
5. Form 8959. If you owe this tax, Form 8959, Additional Medicare Tax, must be filed with your tax return. You must also report any Additional Medicare Tax withheld by your employer on Form 8959.
If you have any questions about the Additional Medicare Tax, help is just a phone call away. Please give us a call for assistance.
If you have any questions about this topic or other tax related questions, please do not hesitate to contact us at 727-327-1999.
ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER, OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.
