Help! I fell off the fiscal cliff

[weeniegeniewife]

That's why I don't like Jan - March. I'm happy when DH has hit the cap. It's a $2000 hit per month for us for those three months.

[spotty_dog]

Ah, maybe that's what happened with us. I also wonder if we have some health insurance changes? I don't have DH's pay stub; I was just looking at the deposit amounts. We definitely don't make anywhere near *that* much!

Definitely could be. Our individual insurance premium went up to about half again as much sometime late last year. Boo. I'm naive and optimistic but I'm hoping we might get a rebate when rates go down after the individual mandate kicks in next year.

[SuzySunshine]

I had to look at DH's paystub after the first check, I was so confused. Ours ended up being the FICA, an increase in health insurance and change in the two state taxes which totally confused me. You really have to look at the stubs with all of the changes to figure out where its really coming from.

What is the additional medicare tax after $200K?

[spotty_dog]

What is the additional medicare tax after $200K?

It's an extra 0.9%, so income after that $200K threshold will be taxed at 2.35% instead of 1.45%. Basically from 0 to $113K you pay 7.65% FICA, then from 113K to 200K you pay 1.45% FICA, and from 200K on (250K for a family, but the employer's tax guide says to start charging it at 200K per employee -- you may get a refund) you pay 2.35% FICA.

[reciprocity]

FICA was 2%. Additional Medicare tax only kicks in after $200K of income, and only in the pay period where your employer has paid you at least $200K YTD. If you're there after just 7 weeks, I'm hard-pressed to pity you. (The other additional Medicare tax is only on investment income and wouldn't have hit your payroll.)

However, like Kris alluded to, there's a cap on Social Security tax. Once you've hit $113K of gross payroll, you don't have to pay that one any more. So if you were paying 0% SS in December and that jumped to 6.2% in January, that would definitely sting. Silver lining is it goes away again at some point.

yeah, SS cap day is a holiday in our household!