No. of Recommendations: 3

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.

Home Fool
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.