Chapter 28 Additional Medicare Tax and Net Investment Income Tax

An Additional Medicare Tax of 0.9% applies to wages, other employee compensation, and self-employment income to the extent such income exceeds a threshold of $250,000 for married persons filing jointly, $200,000 if single, head of household, or a qualifying widow/widower, or $125,000 if married filing separately. Figure liability for the additional tax on Form 8959. If the tax was withheld from your 2017 wages, you show the amount on Form 8959 and add it to your regular withholdings on Form 1040. See 28.2 for details on the 0.9% tax.

A 3.8% tax (Net Investment Income Tax) applies to some or all of your net investment income if your modified adjusted gross income exceeds the applicable threshold of $250,000 for joint filers and qualifying widows/widowers, $200,000 if single or head of household, or $125,000 if married filing separately. The 3.8% tax is figured on Form 8960. See 28.3 for details on the 3.8% tax.

In your planning for 2018, you may need to increase your withholdings or estimated tax installments to account for these taxes.

28.1 Higher-Income Taxpayers May be Subject to Additional Taxes

Higher-income taxpayers may be subject to one or both of two taxes that took effect in 2013 to help pay for health care reform, one on earned income and ...

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