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Medicare Taxable Wages

Medicare Taxable Wages have different rules than Federal Taxable Wages and Social Security Wages. They are closest to Federal Income Tax Wages, but there are deltas.

Currently, ProjectionLab calculates Medicare taxes as 1.45% of all wages not marked tax-exempt. There is also a .9% surcharge for wages exceeding 200k for individuals (250k MFJ, 125k married filing separately). However, it would be more accurate to exclude: - pre-tax medical premiums - pre-tax flexible spending accounts and HSA’s - pre-tax dependent care

Unlike federal taxable wages, Medicare Wages does not exclude retirement plan contributions. So I don’t think we could just exclude any expense marked tax-deductible. Though many of them would be the same. So it might need a separate “Medicare Wages deduction” or the like.

Related: sco.ca.gov/Files-PPSD/form_W2_vs_pay_stub_faq.pdf

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Tagged as Suggestion

Suggested 23 June by user Cornbread