Hi JAFO,I do assume, however, that the large income you reerence was "earned income" subject to FICA and Medicare tax and not dividends, interest or other unearned income not subject to FICA and Medicare tax.Yes, it was earned income and subject to FICA/Medicare.As I understand it, you were the owner of the business and had some control over how to structure the funds you received, some of your current income is coming from the sale of the business, which I suspect is capital gains and not subject to 1.45% Medicare tax on earned income, though it may count as income for purposes of calculating the annual costs you pay for Medicare.The funds I am receiving from the sale of the business are mostly capital gains. Please note that I sold the business in 2004, and that the majority of my Medicare taxes come from my years in the "corporate wars". Yes, the funds I receive do count for purposes of calculating the "means-testing" for annual Medicare premiums.Cheers!MurphHome Fool
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