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What is the limit on earnings subject to a medicare tax deduction?
I suspect you mean wages subject to the FICA contribution/payment. (The payment is generally NOT deductible in determining taxable income). 2007 The maximum amount of wages subject to the social security tax for 2007 is $97,500. There is no limit on the amount of wages subject to the Medicare tax. 2008 The maximum amount of wages subject to the social security tax for 2008 is $102,000. There is no limit on the amount of wages subject to the Medicare tax. 2009 The maximum amount is $106,800, no limit to the medicare tax. Remember. the wage to be taxed is determined using different definitions of income than in other things (like income subject to income tax).
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It is a term for an amount, whether it be determined by its cost, like a medical expense, or some other method (like a child or dependent person being considered as a specific… amount), that is allowed to offset otherwise taxable income. A Tax Deduction could also be donations: # A church, synagogue, or other religious organization; # A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions; # A nonprofit volunteer fire company; # A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services); # A domestic fraternal society , operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes; # A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.
Because that is how Congress decided to pay for the Medicare program.
Those are amounts taken out of your paycheck that do not reduce the amount of tax you have to pay on your salary.
IRA withdrawals are subject to neither Medicare nor Social Security tax.
Taxes deducted from an employee's earnings to finance social security and medicare benefits are called FICA taxes?
YES that is correct. FICA stands for "Federal Insurance Contributions Act." It's the tax withheld from your salary or self-employment income that funds the Social Security and… Medicare programs.The (OASDI) Old Age Survivor and Disability Insurance (FICA) (social security and Medicare taxes) all mean the same tax for social security benefits (SSB or SSDI). All mean the same thing.
You should probably contact a CPA for this as this can be quite complicated and if you deduct things your not supposed to, you can get yourself into alot of trouble. I…n short, royalties would be self-employment income. That means that you will need to pay the 15% FICA/Medicare charge plus your ordinary income tax rate. (Normally when you work for someone else you pay 7.5% fica/medicare and employer pays the other half). You will need to file Schedule SE with your 1040 to determine your total self employment income. That is, your income minus your expenses related to employment.
FICA taxes are a deduction from employee earnings and are also imposed upon employers as an expense?
Yes that is correct.
Yes is the short answer but there are some guide lines to be followed. How Much of the Expenses Can You Deduct? You can deduct on Schedule A (Form 1040) only the …amount of your medical and dental expenses that is more than 7.5% of your AGI(Form 1040, line 38). In this publication, the term "7.5% limit" is used to refer to 7.5% of your AGI. The phrase "subject to the 7.5% limit" is also used. This phrase means that you must subtract 7.5% (.075) of your AGI from your medical expenses to figure your medical expense deduction.
The Medicare Part A Deductible for 2012 is $1,156 for the first 60 days. $289 per day co-payment from days 61-90 days. $578 per day co-payment from 91-150 days.
Yes Medicare will continue to be deducted regardless of age. As long as you have earned income, even after retirement, you continue to contribute to Social Security and Medica…re with FICA taxes at the same rate as before you retired.
Yes, bonuses are like wages. They are subject to the same income and Medicare taxes.