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New Taxes Effective in 2013 - Medicare Tax on Earned Income.
Posted Thursday, January 17, 2013
Passed in 2010 as part of the Affordable Care Act, effective beginning in 2013, there is a new approach to taxing for Medicare. Wage Earners who exceed certain thresholds of income will have an additional 0.9% Medicare Tax withheld. This also applies to the self-employed. This is not a tax on the employer, but only on the employee. Married couples may also be subject to this, even if neither of them individually meets the threshold, and have to pay the tax directly since each spouses wages would not trigger the added employer withholding.
The thresholds are:
Married Filing Jointly $250,000
Married Filing Separately $125,000
Single of Head of Household $200,000
For any of you S-Corporation owners who think you can change your apportionment of wages (earned income) and non-wages (un-earned income) wait before you leap — the next blog post will discuss the new Medicare tax on Unearned Income.
The thresholds are:
Married Filing Jointly $250,000
Married Filing Separately $125,000
Single of Head of Household $200,000
For any of you S-Corporation owners who think you can change your apportionment of wages (earned income) and non-wages (un-earned income) wait before you leap — the next blog post will discuss the new Medicare tax on Unearned Income.