Additional Medicare Tax goes into effect

Starting in 2013, a 0.9% Additional Medicare Tax will apply to individuals’ wages, other compensation, and self-employment income over certain thresholds.  For married persons filing jointly the threshold is $250,000, for married persons filing separately the threshold is $125,000, and for all others the threshold is $200,000. Employers are responsible for withholding the Additional Medicare Tax from wages it pays to individuals in excess of $200,000 in a calendar year, without regard to the individuals’ filing status tax or wages paid by another employer.  An individual may owe more than the amount withheld by the employer, depending on the individual’s filing status, wages, compensation, and self-employment income.  In that case, the individual should make estimated tax payments and/or request additional income tax withholding using Form W-4, Employee’s Withholding Allowance Certificate. To additional information including answers to many of your questions, check out the Basic FAQs and Individual FAQs on the IRS website.