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Who would be subject to additonal Medicare taxes?

A) All employers

B) Employers with employees earning more than $200,000

C) All employees

D) Employees earning more than $200,000

User Zaki
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Final answer:

Employees earning more than $200,000 are subject to additional Medicare taxes of 0.9%, which applies only to the employees and not the employers. Independent contractors must pay both portions of the payroll taxes.

Step-by-step explanation:

Individuals who would be subject to additional Medicare taxes are specifically employees earning more than $200,000. Both employers and employees split the standard payroll taxes, where the current rates are 6.2% for Social Security and 1.45% for Medicare, with no wage ceiling on the Medicare portion. However, there is an additional 0.9% Medicare tax applied to the employees' earnings above $200,000, which does not apply to the employer.

Payroll taxes for Social Security are capped at a certain wage limit, while Medicare taxes continue regardless of income level. It is important to note that independent contractors who receive a 1099 tax statement must pay both the employee and employer side of these payroll taxes, as they are considered self-employed.

User Alagarasan M
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