IRS Developing Form to Calculate Medicare Tax on High-Income Taxpayers

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IRS is developing a form to calculate the additional 0.9 percent Medicare tax liability that some high-income taxpayers will be subject to beginning this year, an IRS official says. The form is yet to be released but will be an attachment to Form 1040, U.S. Individual Income Tax Return, says Paul Carlino, chief of Employment Tax Branch 1 of IRS's Office of Chief Counsel. As taxpayers elect to take additional income tax withholding on their Form W-4 or make estimated quarterly tax payments, they will build up a pool of withheld taxes that can be applied to their 1040 liability or to the additional Medicare tax. Although taxpayers cannot specifically designate that their tax withholding be applied to the additional Medicare tax, the additional withholding that does not go toward income tax can be applied to a taxpayer's additional Medicare tax, Carlino says.

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