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Changes to the IRS Form 1040: The Medicare Surcharge

Do you make above $250,000 (married joint filer) or $200,000 (individual filer)? For 2013 filers, you get to pay an additional tax starting this year.

Prior to tax year 2013, the Medicare Payroll tax was 2.9%. Self-employed taxpaxers pay the entire 2.9% themselves. Non self-employed taxpayers pay this tax split evenly between employer and employee, each paying 1.45%

The new surtax that starts this year was implemented as part of paying for Obamacare. It tacks on an additional 0.9% tax for filers above the aforementioned thresholds. Additionally, if you are married filing separately, the threshold is $125,000. See below:

Previous Law:

Employer/Employee 1.45%/1.45%
Self-employed 2.9%

Obamacare Tax Hike, 0.9% Surtax

Individual: First $200,000 (same as old law)
Married/Joint: First $250,000 (same as old law)
Married/Separately: First $125,000 (same as old law)

Individual: Above $200,000
Married/Joint: Above $250,000
Married/Separately: Above $125,000

Employer/Employee 1.45%/2.35%
Self-employed 3.8%

This additional tax is found on pages 2000-2003 of the PPACA.

If you think you may owe the new 0.9% tax, you should fill out the “Additional Medicare Tax” Form, which is also called Form 8959
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