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Discussion:Understanding the Proposed New Payroll Tax Increase

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Discussion Forum Index --> Advanced Tax Questions --> Understanding the Proposed New Payroll Tax Increase


Discussion Forum Index --> Tax Questions --> Understanding the Proposed New Payroll Tax Increase

Umk395 (talk|edits) said:

23 December 2009
Congress/Senate is proposing an increase in the payroll tax rate for families earning more than $250K. Am wondering what this might look like in practice.

Example: Husband's W-2 = $110,000 Wife's W-2 = $160,000 Since their total income is over the $250K limit, would they pay the increased tax on the excess $10K when they file their tax return? The separate employer's would have no way of knowing what the other spouse earned and each one individually doesn't exceed the $250K threshold on his/her own. So how is this increased payroll tax imposed (if at all) in this situation?

Merry Christmas to all.

DaveFogel (talk|edits) said:

23 December 2009
See ยง9015 of the Senate health care bill (starts on page 2040):

http://democrats.senate.gov/reform/patient-protection-affordable-care-act.pdf

According to the bill, for years beginning after 12/31/2012, employers will be required to collect the additional 0.5% Medicare tax for wages paid in excess of $200,000 (not counting wages of the spouse), and if the combined wages of both spouses on a joint return exceed $250,000, the couple will have to report the additional tax on the return. Also, if the employer fails to withhold the additional tax on wages in excess of $200,000, the employee will have to report the additional tax on the return.

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