Medicare Surtax Kicking In at $200k+
It’s October and for many urgent care docs who are getting a W2 income (are employees and not independent contractors or self-employed) they are likely breaking the $200k gross income mark. If that’s the case, then you may have noticed a smaller paycheck compared to what you normally net.
By now you should have maxed out the social security taxes which is 6.2% of up to $118,000 (again, if you are employed, self-employed pays 12.4%). That means the most you will pay for SS taxes is $7,316 regardless of your income.
Your federal and state income taxes are going to continue in the marginal fashion as before. You may live in a state with no income tax or a fixed state income tax in which case the tax percentage is more straightforward.
So that leaves medicare taxes which are 1.45% up to $200,000 for someone that’s employed. For any amount >$200k there is an added surtax of 0.9% for a grand total of 2.35%.
My medicare taxes up until today were in the $130-180 range per bi-monthly paycheck. Since I have now gone over the $200k gross income limit my new tax rate for medicare will be the 2.35% from above which came out to $340 this paycheck.