As a Tax payer you must be aware of all the terms and tax benefits that you can get. May people are unaware of Additional Medicare Tax which was implemented recently in the year 2013. It was implemented in the basis of Affordable care Act (ACA).
According to ACA, If your income exceeds a certain limit, you are required to pay an Additional Medicare Tax on top of the ‘regular’ Medicare tax.
Who needs to pay Additional Medicare Tax?
The IRS rule states that the percentage of additional Medicare tax is 0.9%. It is applied to:
- Self-employment income
- Railroad retirement (RRTA) compensation that exceed a certain threshold
What is the income limit beyond which Additional Medicare tax is levied?
A tax payer is liable for Additional Medicare Tax if his income exceeds the following amount:
- Single – $200,000
• Married Filing Separately – $125,000
• Married Filing Jointly – $250,000
• Head of Household – $200,000
• Qualifying Widow(er) with Dependent Child – $200,000
The Additional Medicare Tax also applies to the value of non-cash taxable wages, such as fringe benefits.
What the Law States?
According to IRS, if employee earns over $200,000 from an employer in a calendar year, the employer must withhold Additional Medicare Tax from your wages. The employer is ordered to withhold the taxes without taking care of employee’s filing status or their income from other sources.
What we offer?
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