Question

Compute the additional Medicare tax for the following taxpayers. If required, round your answers to the nearest dollar.

a. Mario, who is single, earns wages of $589,200 in 2018. His total Medicare tax is $________.

b. George and Shirley are married and file a joint return in 2018. During the year, George earns wages of $205,100, and Shirley earns wages of $307,650. Their total Medicare tax is $______.

c. Simon has net investment income of $45,680 and MAGI of $228,400 and files as a single taxpayer. Simon's additional Medicare tax is $ _____.

Answer 1

a) Medicare tax :
$200,000  x 1.45%	$     2,900.00
($589,200 - $200,000) x (1.45% + .9%)	$     9,146.20
Medicare Tax	$   12,046.20
Mario is filing as  an individual whose income is $589,200, you will pay a 1.45% Medicare tax on the first $200,000, then 2.35% (1.45% plus 0.9%) on the next $389200 (589200-200,000)
b)
Total Gross Income = (205100+307650)	$ 512,750.00
Medicare tax :
$250,000  x 1.45%	$     3,625.00
($512,750 - $250,000) x (1.45% + .9%)	$     6,174.63
Medicare Tax	$     9,799.63
George and Shirley are married and file a joint return their income is $512,750, you will pay a 1.45% Medicare tax on the first $250,000, then 2.35% (1.45% plus 0.9%) on the next $262,750 (589200-200,000)
c)
Simon's MAGI is $228,400 and $45,680 is net investment income. His MAGI is $28,400 over the $200,000 threshold for individuals. He'll owe the 3.8% Medicare tax on his $28,400 over the threshold, because it is less than his $45,680 in net investment income. Simon  will also owe 0.9% on the $28,400 she is over the $200,000 earned income threshold for individuals
Medicare surtax = 28,400 x 3.8%	$     1,079.20
Medicare  = 28,400 x .9%	$        255.60
Total	$     1,334.80