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Financial Planning / Tax Strategies


Subject:  Re: Investment Income Surtax Date:  12/2/2012  11:44 AM
Author:  ptheland Number:  117041 of 132811

At $150K each, you must make estimated tax payments using a W-4.

I haven't researched this, and all my research tools are at the office. (OK - they're all on the internet, but the passwords and account numbers are at the office.) Further, I haven't read any of the links posted earlier in the thread. So I'm just doing some educated guessing.

A W-4 is for adjusting your income tax withholding, not for making estimated tax payments. (Those are done with Form 1040-ES.) I'm pretty the IRS is saying you can adjust your income tax withholding to account for this additional tax. That would be consistent with those who have some self employment income in addition to their wages.

And your forgot the other side of the coin. Take that married couple, but only one is working and making $220k. That spouse will have the medicare surtax withheld, but the couple won't be subject to the tax. I'm sure the overwithholding will be handled just like additional income tax withholding on the tax return.

I'm seeing another worksheet or perhaps a new form in the not too distant future. One to calculate the correct amount of this Medicare surtax and reconcile it with the Medicare taxes withheld. Schedule MC, perhaps?

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