What Is The Maximum Medicare Tax For 2019?

What Is The Maximum Medicare Tax For 2019?

The maximum amount of Medicare taxes an individual is allowed to pay, as of 2019, is $1,448.

The Medicare tax rate you pay is based on your income that is subject to Medicare taxes. If you're self-employed, the income you pay Medicare on is the sum of your net earnings from self-employment and any wages. Wages are the amount of your wages up to the Social Security wage base ($132,900 for 2019).

Your net earnings from self-employment are your gross income from self-employment minus allowable business deductions. To calculate your net earnings from self-employment, add up the income you made from your business minus any deductions you were allowed to take.

If you also have wages other than those earned from your self-employment, you have to calculate how much income is subject to Medicare taxes. If you have only self-employment income, your net self-employment earnings are subject to the 2.9 percent Medicare tax.

If you have other employment wages, you need to calculate the part of your wages that was subject to Medicare taxes. In other words, you need to calculate the part of your wages that was not covered by the Medicare tax that was withheld from your paycheck.

Use the following formula to find out the amount of your wages subject to Medicare taxes:

Wages subject to Medicare taxes = Wages - Medicare wages withheld

For example, let's say you have $20,000 of wages from self-employment and $50,000 of wages from employment. Your employer withheld $5,000 in Social Security taxes from your paycheck. If you determine that you were not allowed to take a business expense deduction for $10,000 of your self-employment earnings, you're allowed to subtract that from your net self-employment earnings ($20,000 – $10,000 = $10,000).

That means that $10,000 of your self-employment earnings is subject to Medicare taxes.

You also need to calculate the part of your wages that is subject to Employee Retirement Income Security Act (ERISA) taxes. The formula is slightly different, but the same principle applies. You're allowed to subtract any business expenses you were not allowed to deduct from your income.

To find out how much of your wages are subject to ERISA taxes, use the following formula:

Wages subject to ERISA taxes = Wages - ERISA wages withheld

For example, let's say you have $15,000 of wages from employment and $20,000 of net self-employment income. Your employer withheld $3,000 in Social Security taxes and $600 in Medicare taxes. If you determine that you were not allowed to take a business expense deduction for $5,000 of your self-employment earnings, you're allowed to subtract that from your net self-employment earnings ($20,000 – $5,000 = $15,000).

That means that $15,000 of your wages from employment are subject to ERISA taxes.

Once you determine the total amount of taxes you're subject to pay, you can find out your Medicare tax rate. Since the Medicare tax is 2.9 percent, you can divide the Medicare taxes you're subject to pay by your total taxable income to determine your Medicare tax rate.

The formula is as follows:

Medicare tax rate = Medicare taxes divided by total taxable income

For example, let's say you have $30,000 of taxable income and $3,000 of Medicare taxes. Your Medicare tax rate would be 0.10, or 10 percent.

Please note that your employer's share of the Medicare tax is also 2.9 percent. However, this amount is taken out of your wages before the IRS gets it, so you don't have to worry about paying it.

If your employer does not withhold any Medicare taxes from your wages, you're still subject to pay the Medicare taxes. However, you can avoid paying the 2.9 percent tax on your self-employment income by taking advantage of the employer tax deduction or the employer withholding tax.

Cafeteria Plans and Medical Flexible Spending Arrangements

If you're enrolled in a cafeteria plan or a Medical Flexible Spending Arrangement (FSA), you may be able to deduct a portion of the money that is contributed to these plans. These deductions reduce your adjusted gross income, which, in turn, reduces the total amount of taxes you're subject to pay.

To determine the amount of your deduction, you have to figure out your adjusted gross income. You can use the same chart as shown above to help you figure out your adjusted gross income.

Once you have your adjusted gross income, you need to calculate how much of your income you want to deduct. Some employers let you decide. Others have a set amount that you can deduct.

For example, you may have the option to deduct a fixed amount of your contribution. You can also decide to deduct the entire amount.

Once you have figured out the amount you want to deduct from your cafeteria plan or FSA contribution, you can figure out your tax rate. You can find your tax rate on the same chart as shown above.

Let's say you have $100,000 of adjusted gross income and you want to deduct $2,000 from your cafeteria plan contribution. You would have to use the following formula to find out your Medicare tax rate:

Medicare tax rate = $2,000 / $100,000 = 0.02 = 2 percent

If you decide to deduct your entire cafeteria plan contribution, your tax rate would be the same as if you had only deducted $2,000.

If you're enrolled in a cafeteria plan or a FSA, you may be able to deduct a portion of the money that is contributed to these plans. These deductions reduce your adjusted gross income, which, in turn, reduces the total amount of taxes you're subject to pay.

To determine the amount of your deduction, you

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