taxes

5 higher taxes for wealthy taxpayers

Taxes » Tax Filing » 5 Higher Taxes For Wealthy Taxpayers

0.9 percent added payroll tax
0.9 percent added payroll tax © Robert Kneschke/Shutterstock.com

A provision in the Affordable Care Act calls for an additional 0.9 percent Medicare payroll tax on wage income over certain thresholds. This is on top of the 1.45 percent Medicare tax for which taxes already are withheld.

Employers must withhold the added tax when a single taxpayer's income exceeds $200,000. This income level also applies to head of household and qualifying widow/widower taxpayers.

Married taxpayers who file joint returns face the added tax when their combined income exceeds $250,000. The income limit is $125,000 if married filing separately.

The added Medicare tax also applies to self-employment earnings. And the earnings thresholds are not indexed for inflation, so more individuals could face the tax as their incomes increase over the years.

You can't have extra tax withheld specifically for the 0.9 percent levy. However, any excess income tax you have withheld applies to any taxes -- including the new Medicare portion -- you owe on your Form 1040. Estimated tax payments also can help cover the new tax.

Conversely, if your employer withheld the added tax because you made more than $200,000 but your combined income with your spouse does not meet the $250,000 joint filing threshold, you'll claim credit for any excess Medicare tax when you file your return.

advertisement

Show Bankrate's community sharing policy
          Connect with us
MORTGAGE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed 4.17%  0.07 4.24%
15 year fixed 3.26%  0.04 3.30%
5/1 ARM 3.33%  0.09 3.42%
 
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.29% --0.00 4.29%
50K FICO-based HELOC 4.04% --0.00 4.04%
100K FICO-based HELOC 3.89% --0.00 3.89%
 
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.79% --0.00 2.79%
48 month used car loan 2.99%  0.01 2.98%
60 month new car loan 3.24% --0.00 3.24%
 
View Rates in your area Next
Product Rate Change Last week
1 Year CD 0.97%  0.02 0.95%
2 Year CD 1.16%  0.01 1.15%
5 Year CD 1.71%  0.04 1.75%
 
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.75%  0.02 15.77%
Cash Back Cards 16.45%  0.03 16.48%
Low Interest Cards 10.96% --0.00 10.96%
 
Next
advertisement
DAILY TAX TIP NEWSLETTER

Get expert advice during tax season on tax preparation and tips for cutting your tax bill.

advertisement

Connect with us