Question

61. Melody and Todd are married and have employee wages of $250,000 each in 2018. They have no other income. How much additional 0.9% Medicare tax will Melody and Todd have to pay or receive as a refund when they file their 2018 income tax return? a. $1,350 will be due with their return in addition to amounts withheld. b. $1,350 will be refunded with their return. c. $900 will be refunded with their return. d. $3,600 will be due with their return in addition to amounts withheld. ANSWER: a Please explain to me how to get the answer (a)

Answer 1

so medicare tax upto 200000 = 1.45% and above 200000 = 2.35% [1.45+0.9]

So when individual are calculated:

Melody = [ 200000 *1.45%] + [ 50000*2.35%] = 4075

Todd = [ 200000 *1.45%] + [ 50000*2.35%] = 4075

TOTAL = 4075 + 4075 = 8150

When annually they are filing their joint return, then:

Total salary = 500000

Medicare upto 250000 = 3625 [250000*1.45%]

Rest 250000 = 5875 [250000*2.35%]

Total = 3625 + 5875 = 9500

So refund due = 9500 - 8150 = 1350