Question

Lionel, a single taxpayer, reported $46,175 of self-employment income on his 2018 Schedule SE, Section B, Line 6.

Lionel also received two Forms W-2 in 2018; the applicable amounts for Medicare wages and Medicare tax withheld are summarized below:

Lionel's W-2 Forms

Form W-2 DescriptionForm W-2 Box #AmountEmployer A
Medicare wages and tipsBox 5119,000.00Employer A
Medicare tax withheldBox 61,725.50Employer B
Medicare wages and tipsBox 570,000.00Employer B
Medicare tax withheldBox 61,015.00

Directions

Prepare Form 8959 (Parts I, II, IV, V)

Download Form 8959 - Compensation Practical Application.pdf.

Complete Parts I, II, IV and V of Form 8959 using the case information provided above.

Submit the completed tax form

Answer 1

Solution:

It's been a confusing situation as the question presentation is very poor.

The question is presented as:

Form W-2 DescriptionForm W-2 Box #AmountEmployer A
Medicare wages and tipsBox 5119,000.00Employer A
Medicare tax withheldBox 61,725.50Employer B
Medicare wages and tipsBox 570,000.00Employer B
Medicare tax withheldBox 61,015.00

The correct presentation is:

Form W-2
Description	Form W-2	Box #	Amount
Employer A	Medicare wages and tips	Box 5	1,19,000.00
Employer A	Medicare tax withheld	Box 6	1,725.50
Employer B	Medicare wages and tips	Box 5	70,000.00
Employer B	Medicare tax withheld	Box 6	1,015.00

The solution is presented in image form