A host of tax changes occurred last year (2013) and now the filing season—the moment of truth--is here. Do you have all the information you need to make the right decisions concerning your business taxes? Through our blog, e-newsletter and timely email messages, we’ll be covering these changes through the filing season, just as we have done throughout 2013.
The Patient Protection and Affordable Care Act of 2010 (ACA), infamously known as ObamaCare, has triggered many of the changes in the tax code that will be prevalent in your filings this year. And, though many of these provisions are for healthcare end-users, some are for businesses as well.
Beginning in 2013, the ACA called for taxpayers with FICA wages over $200,000 annually ($250,000 for joint filers and $125,000 for married filing separately) to pay an additional 0.9% Medicare tax on the excess earnings. The Tax Warriors® have covered this extensively in various communications to our clients and friends; most notably in a blog post in July of last year and another one in November. We stressed the importance of withholding strategies as a way to defray the impending sticker shock that may occur on April 15th.
This additional tax is not applied like other Medicare taxes. Unlike regular Medicare taxes, the additional 0.9% doesn’t include a corresponding employer portion. However, employers are obligated to withhold the additional tax to the extent that an employee’s wages exceed $200,000 in a calendar year. The $200,000 amount doesn’t include the employee’s income from any other sources or take into account his or her tax filing status. This is where you, as the taxpayer, have to keep abreast of all your forms of income as this tax applies to all income over the respective thresholds.
As we’ve explained in blogs and other communications to our business-owning clients and friends, these changes can creep up pretty quickly. And, with so many occurring in a one-year period, some tax law changes may have been forgotten or overlooked. The highly skilled tax consultants at Drucker & Scaccetti have delved deeply into this and every other tax provision on the books. We understand the implications and how you can employ the right strategies for your business. Contact us via “Ask A Tax Warrior” and we’ll help you and your business navigate all the changes and position you to be compliant and keep as much of your hard-earned revenue as possible. We are always prepared to help you with this or any other tax-related matter.