Question

Jill Green has w-2 wages of $165,000. Her employer withheld medicare taxes at 1.45% of her W-2 amount. Her husband, Bill Green, has w-2 wages of $97,000. His employer withheld medicare taxes at 1.45% of his W-2 wages. They file a joint tax return.

Determine what amount, if any, is the additional high wage surtax that will be computed on their tax filing.

Answer 1

Jill Green and Bill Green

The additional high wage surtax for the joint filers is

$108.

Step-by-step explanation:

Medicare tax rate = 1.45%

Surtax rate = 0.9%

Jill Green's w-2 wages = $165,000

Bill Green's w-2 wages = 97,000

W-2 wages for couple = $262,000

Threshold for joint filers = 250,000

Excess w-2 wages = $12,000

Additional high wage surtax = $12,000 * 0.9% = $108

b) Jill and Bill Green, who are filing jointly, are expected to pay an additional Medicare tax of 0.9% on their W-2 income in excess of $250,000. The Additional Medicare Tax (AMT) on Wages is imposed on employees only. Employers match the regular Medicare tax of 1.45%. Medicare wages are reported on Form W-2 and are usually based on an employee's total wages for the year less certain benefit deductions, such as medical and dental insurance premiums, health savings accounts, and contributions to dependent care flexible spending arrangements.