Understanding the Additional Medicare Tax and Its Impact on Higher Earners
Explore the 2022 Medicare surcharge tax and its impact on professionals. Discover income considerations, filing status implications, and tips for managing costs.
The Additional Medicare Tax is a 0.9% surtax that applies to earned income above certain thresholds. For 2022, these thresholds were $200,000 for single filers and $250,000 for married couples filing jointly.
This tax is separate from the standard Medicare payroll tax (1.45%) and from IRMAA surcharges on Medicare premiums. Understanding both is essential for comprehensive retirement tax planning.
The 0.9% additional tax applies to wages, railroad retirement compensation, and self-employment income above the threshold. Employers must begin withholding once wages exceed $200,000 — regardless of filing status.
For high-income professionals, understanding both the Additional Medicare Tax and Medicare IRMAA surcharges is essential. Together, these can significantly impact take-home pay and retirement income.
Learn about strategies to reduce your MAGI and manage overall Medicare-related costs. Proper tax planning can help minimize the impact of these surcharges.
Our tools help project total Medicare costs including taxes and surcharges.
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