* Form 8959, Additional Medicare Tax
, and Form 8960, Net Investment Income Tax--Individuals, Estates, and Trusts, for higher-income taxpayers in which an emphasis was placed in class on the 0.9% and 3.8% Medicare taxes
- Automatically calculates Federal Withholding Tax, Social Security, Medicare Tax
and Employer Unemployment Taxes.
We could fix the problem virtually overnight by raising the Social Security tax rate by 1.415 percent to 7.615 percent and increasing the Medicare tax
rate by 0.32 percent to 1.77 percent .
* Tax rate: 15.3% (12.4% OASDI tax plus 2.9% Medicare tax
It's also true that if you change your federal tax regimen to sole proprietorship or partnership taxation, this risks your increasing your liability for the New Hampshire 5 percent interest and dividends tax and your self-employment and Medicare tax
On the other hand, the additional taxes discussed above are in addition to the regular tax liability, so a taxpayer subject to AMT could also have to pay the additional Medicare tax
* The Medicare tax
rate is 1.45% each for the employee and employer.
The version of the American Health Care Act bill that passed in the House last week would keep the additional Medicare tax
, or Medicare surtax, in place until the 2023 tax year.
The District of Columbia also sees the greatest percentage of the population benefiting from repeal of the additional Medicare tax
, 6.1 percent, while California again had the most beneficiaries at 637,000.
What are the Social Security and Medicare tax
rates for employers and employees?
Singleton explains that those ineligible for premium-free Part A because they did not pay the Medicare tax
during their working years may purchase it (at a cost of $426/month in 2014) but, if they do not do so immediately, they are penalized.
Many taxpayers will be subject to the net investment income tax (NIIT) and additional Medicare tax
. The NIIT adds a 3.8 percent tax on the lesser of net investment income or the amount that a taxpayer's modified adjusted gross income exceeds $200,000 for single filers ($250,000 if married filing jointly).