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Financial Planning / Tax Strategies
|Subject: Re: 3.8% Medicare Tax||Date: 2/23/2013 10:44 AM|
|Author: Wradical||Number: 117851 of 120820|
The new 3.8% Medicare tax appears to apply only when joint filers have an AGI above $250K. If I am reading things correctly, in computing the $250K, you can exclude income from IRAs, pension plans, and the like. My question is: Are SS payments included when coming up with the $250K threshhold? If IRA distributions aren't, then why would SS? Thanks.
That's not quite right.
The items you listed are excluded from investment income, and not subject to the tax. But they are NOT excluded in determining modified AGI, in determining whether you're over the $250K threshold.
"Modified AGI", for this purpose, means AGI, PLUS the foreign earned income exclusion, less any deductions related for foreign earned income.
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