Today TaxMama hears from Maria from Oakland, CA who wants to know, “Are Medicare wages taxable?”
Haven’t you figured it out yet – all wages are taxable. Unfortunately.
Tell you what, let’s look at a copy of the W-2 you’re going to get. The link is below.
You can see that the Medicare Wages are shown in Box 5 of your W-2 .
They are subject to Medicare taxes at the rate of 1.45% of all your wages. There is no limit.
The Social Security Wages on shown in Box 3 of your W-2 are subject to Social Security taxes
at the rate of 6.2%. That stops at $90,000 for 2005
The Wages, Tips and Other Compensation on shown in Box 1 of your W-2 are subject to Federal Income Taxes at your personal tax rate. And while the withholding taken by your payroll department will be based on the number of exemptions you’ve claimed, the actual tax may be higher – or lower if you don’t understand how the exemptions work.
You’ll find a good explanation about that here – Five Simple Steps to Filling Out Your W-4
Sure, it’s confusing, but, see, you have all the tools to get educated.
And, remember, you’ll find answers to questions about your payroll and other tax issues, free. Where? Where else? At TaxMama.com t else do you need to know? IRS’s instructions for the 1099-MISC might be helpful???
And, remember, you’ll find answers to questions about your payroll and other tax issues, free. Where? Where else? At TaxMama.com
- Ask TaxMama :: Where taxes are fun and answers are free
- IRS Form W-2 :: Advance copy of your next W-2
- TaxMama Article :: Five Simple Steps to Filling Out Your W-4