INDIVIDUAL IS RESPONSIBLE FOR PAYING THE ADDITIONAL 0.9% MEDICARE TAX. Josh and Anna are married. Josh’s salary is $180,000, and Anna’s wages are $150,000. Assume they have no other wage or investment income. Their total combined wage income is $330,000 ($180,000 + $150,000). Since this amount is over the $250,000 threshold, they owe the additional [...]
ADDITIONAL 0.9% MEDICARE TAX Individuals must pay an additional 0.9% Medicare tax on earned income above certain thresholds. The employee portion of the Medicare tax is increased from 1.45% to 2.35% on wages received in a calendar year in excess of $200,000 ($250,000 for married couples filing jointly; $125,000 for married filing separately). Employers must [...]
2014 SOCIAL SECURITY WAGE BASE The Social Security Administration announced the wage base for computing social security tax for 2014 will increase to $117,000 from the 2013 wage base of $113,700. This means that for 2014, the maximum OASDI portion of the FICA tax an employee will pay is $7,254 ($117,000 x 6.2%), and employers [...]
Before this year, you could claim itemized deductions for medical expenses paid for you, your spouse and your dependents to the extent those expenses exceed 7.5% of your adjusted gross income (AGI). But the rules have changed for the worse in 2013 and beyond. Due to the 2010 Affordable Care Act, the old 7.5%-of-AGI [...]
IRA owners and beneficiaries who have reached age 70 ½ are permitted to make donations to IRS-approved public charities directly out of their IRAs. These so-called qualified charitable distributions, or QCD‘s are federal-income-tax-free to you, but you get no charitable deduction on your tax return. But,that is fine because the tax-free treatment of QCDs [...]
Many taxpayers make adjustments to their investment portfolio near year-end to take profits, to recognize tax losses to reallocate their assets, and for various other reasons. When making purchases of mutual funds near year-end, however, you should be wary of actually purchasing a tax liability. This is a danger: mutual funds must pay out their [...]