Use this article as a heads up — this may be coming down the road in 2013, and so you need to be aware of the additional 0.9% Medicare tax that is scheduled to go into effect in 2013.
(I love how they make it 0.9% It reminds me of a car salesman trying to sell you a car for under $50K when the price tag is $49,999.)
Here are the main points that you need to be aware of:
- This is a part of the 2010 Patient Protection and Affordable Care Act (commonly called Obamacare). We’re expecting a Supreme Court ruling on this next week on the constitutionality of this act. This act may be upheld in its entirety, it may be completely struck down, or somewhere in between. But, as of now, it is the law, and so the IRS is preparing for this to go into effect as scheduled.
- This tax is for the employee portion only for Medicare. The employer portion will remain 1.45%
- This tax is only for wages in excess of $200,000.
There are (of course) a couple of other complications and exceptions. If the Supreme Court upholds Obamacare, then look here for some articles in the future on how to best plan for and account for this tax increase.
For more info, take a look at the IRS FAQs (pdf) about this tax increase.