Question

For 2020, Ms. Deming earned wages totaling $225,000.

Required:
1. Calculate any 0.9 percent additional Medicare tax owed, assuming that Ms. Deming is single.
2. Calculate any 0.9 percent additional Medicare tax owed, assuming that Ms. Deming files a joint return with her husband who earned $100,000 of wages for 2019.

Answer 1

Additional Medicare is charged on the wages that are higher than $200,000.

1. Medicare owed assuming Ms. Deming is single:

= (225,000 - 200,000) * 0.9%

= 25,000 * 0.9%

= $225

2. Medicare owed assuming Ms. Deming files a joint return with her husband.

When filed together, their wages would be considered jointly.

= ( (100,000 + 225,000) - 200,000) * 0.9%

= 125,000 * 0.9%

= $1,125