World Class Mergers & Acquisitions  |  For Companies $5 Million to $100 Million in Revenue

Merger & Acquisitions FAQ – July 2014

Q: What is the Additional Medicare Tax?

A: Additional Medicare Tax went into effect in 2013 and applies to wages, compensation, and self-employment income above a threshold amount received in taxable years beginning after Dec. 31, 2012.  An employer must withhold Additional Medicare Tax on wages it pays to an employee in excess of $200,000 in a calendar year.

Q: What is the rate of the Additional Medicare Tax?

A: The rate is 0.9 percent

Q: What wages are subject to the Additional Medicare Tax?

A: All wages that are currently subject to Medicare Tax are subject to Additional Medicare Tax if they are paid in excess of the applicable threshold for an individual’s filing status.

By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors