Welcome, I'm Sharon Kreider. I'm a CPA and an enrolled agent in Sunnyvale, California. I teach tax update classes for tax professionals. This is an update on the Affordable Care Act and its provisions for the 3.8% Medicare tax. The new Medicare tax, beginning in 2013, raises $210 billion of the very expensive price tag of Affordable Care Act. So, we need to see how that's going to apply to us and our clients in the very near future. Burn Joven and I recently presented a webcast for Paychecks. We had 2,500 viewers, and those 2,500 viewers came up with lots and lots of questions. So, let me give you the top three questions from our Paychecks webcast. Question 1: What is net investment income? For purposes of the new tax, net investment income includes interest, dividends, annuities, and passive income, including all rental income, which, by definition, is passive income. It also includes gains from the sale of those kinds of assets. So, if I sell my apartment building, that would be gains from net investment income from the sale of a passive activity, and I would pay the 3.8% if my adjusted gross income exceeds $200,000 (single) and $250,000 (married filing joint). Question 2: When I sell my personal residence, do I pay Medicare tax on the sale? You and I know there's a viral email going around that Obamacare, the Affordable Care Act, imposed a new 3.8% sales tax excise tax on the sale of your personal residence. That's not the case, especially if you read the email where it says I sell my house for $100,000. I'd have to pay $3,800 of extra tax because of Obamacare. There is Medicare tax on net investment income, including capital gains, but only to the extent the capital gains are taxed. So, if...
Award-winning PDF software
4137 reported on 1040 line Form: What You Should Know
Second, you must include the amount that hasn't been reported to the employer toward your social security and Medicare taxes. In the example below, the employee hasn't filed a return, so the employee must include in income the amounts not reported to the employer to calculate social security and Medicare taxes on unreported tips. Example 2 Employee earns 100 on her tips. The employee didn't report 1,500 in tip income to the employer. Therefore, the employer's social security and Medicare taxes of 4,000 (2,500 social security and 2,000 Medicare) will be paid on this unreported tip income. However, since this tip income is not reported to the company, 900 (400 social security, 400 Medicare) is not included in employee's income for federal income and employment tax purposes. Note: If IRS Form 4137 doesn't report unreported tips, it isn't necessary to file. However, if there is an error to report some tips or the income is over the reporting threshold, the IRS may need to fill out the form. Reporting Tip Income May 1, 2024 — The IRS may assign a new income to the employee.
online solutions help you to manage your record administration along with raise the efficiency of the workflows. Stick to the fast guide to do Form 4070a, steer clear of blunders along with furnish it in a timely manner:
How to complete any Form 4070a online: - On the site with all the document, click on Begin immediately along with complete for the editor.
- Use your indications to submit established track record areas.
- Add your own info and speak to data.
- Make sure that you enter correct details and numbers throughout suitable areas.
- Very carefully confirm the content of the form as well as grammar along with punctuational.
- Navigate to Support area when you have questions or perhaps handle our assistance team.
- Place an electronic digital unique in your Form 4070a by using Sign Device.
- After the form is fully gone, media Completed.
- Deliver the particular prepared document by way of electronic mail or facsimile, art print it out or perhaps reduce the gadget.
PDF editor permits you to help make changes to your Form 4070a from the internet connected gadget, personalize it based on your requirements, indicator this in electronic format and also disperse differently.
Video instructions and help with filling out and completing Form 4137 reported on 1040 line
