Question

Where do taxable Medicare wages get reported?

A. On line 5c of Form 941
B. On line 2 of Form 941
C. In box 3 of Form W-2
D. In Part 1 of Form 940

Answer 1

Taxable Medicare wages are reported in box 3 of Form W-2, with employers and employees each contributing 1.45% of the wages as Medicare tax, which is a proportional tax.

Step-by-step explanation:

Taxable Medicare wages are reported in box 3 of Form W-2. Employers are responsible for withholding Medicare taxes from their employees' wages and match this contribution. This tax rate is 1.45% for both the employer and the employee.

The taxable Medicare income is a proportional tax, which means it is a flat percentage of all wages earned, without a wage limit, unlike Social Security taxes. Independent contractors, who typically receive a 1099 tax statement, are responsible for paying both the employee and employer portions of Medicare and Social Security taxes, as they are considered both the employer and the employee.