Original MDTAXES Forum

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Mar 31, 2010 - 4:06PM

Increased medicare withholding with new healthcare legistation

I just read the monthly newsletter, and am still not entirely clear on the new Medicare taxes.

If a single individual makes $250,000, what will they pay? Will they pay 2.35% on the first $106,800 of their income, AND then 2.35% on their income above $200,000 (ie, $50,000 for someone making $250,000)?

Also, you are saying the SS tax is unchanged, and is only on the first $106,800 of income... right?

Thanks so much!!

Zip Code: 02446

Andrew Schwartz CPA

Mar 31, 2010 - 7:47PM

Re: Increased medicare withholding with new healthcare legistation

Hi,

It's my understanding that a person making more than $250k would have Medicare taxes witheld from their pay at a rate of 1.45% on the first $250k earned, and then the Medicare taxes withheld will increase to 2.35% for each dollar earned over the $250k threshold. The employer will continue to pay 1.45% on each dollar earned.

I hope this answers you question.

Zip Code: 01801