New Year to Bring New Medicare Taxes, Raise Money for the Program
Medicarenewsgroup.com: September 20, 2012.
Medicare finances are already complex, but 2013 will bring a new and confusing tax burden on wealthier Americans. This is because of a change in the payroll tax rate and a new surtax on investments. The combined new payroll tax and surtax is expected to raise $210 billion over a 10-year period.
The payroll tax is easier to grasp: it will go from the current 1.45 percent on wages (this percent is each paid by the employee and employer) to 2.35% for individuals earning more than $200,000 a year and for couples earning more than $250,000. The employer tax rate will remain at 1.45 percent.
The surtax will cover everything from interest on checking accounts, to stock dividends, to the sale of homes. There’s a lot of misinformation rocketing around the Internet on this topic, and this article is meant to clarify the subject.
The tax is included in the Affordable Care Act (ACA), and it is essentially a 3.8 percent levy on income from investments. It is called the unearned income surtax.
The population affected by this surtax includes individuals with incomes higher than $200,000 a year and couples earning more than $250,000 (the same groups of people affected by the payroll tax raise). Unlike the payroll tax that is based on wages, however, the surtax is linked to how much income is generated from various investments. Read more