Tax preparation season is almost upon us and to assist in planning we will be posting a series of tips over the next few weeks. As always if you have a question or would like to schedule your tax preparation appointment please contact us.
Additional Medicare Tax
Additional Medicare tax – applies to wages and compensation above (including self-employment income)
$250,000 for married filing jointly and $200,000 for single taxpayers. Your employer must withhold the additional Medicare tax from wages if your wages are in excess of $200,000. Beware if you are married andeach spouse has wages and compensation less than $200,000 individually, but greater than $250,000 in total. You will be subject to the additional Medicare tax and it will not be withheld. As a result, you may owe more taxes when you file your 2013 tax return. Alternately, if one spouse makes $200,000 but the joint income is less than $250,000, you will have a credit towards your 2013 income taxes for the additional Medicare tax withheld.
Dawn Schneider has been a Certified Public Accountant (CPA) for over 20 years. She enjoys providing top notch service to individuals and small to mid-sized business for all of their accounting and tax needs.