- Your W2 for Tax Year 2012 may show some new information you never saw before. If you work for a larger company, issuing 250 W-2’s or more, and you have Health Insurance coverage, the company must report the total cost of your Health Insurance in Box 12 of your W-2, with code DD. This cost is informational only, and is NOT TAXABLE INCOME. The cost shown is a combination of the employers’ cost and your contribution, if any.
- There is a great deal of rumor regarding the sale of your home, and the 3.8% Medicare Tax, which takes effect in the 2013 Tax Year. This tax, as we have explained in another “TAX NEWS YOU CAN USE” article, published by CPA Accounting and Tax Solutions, www.cpaacctax.com, applies to higher income taxpayers, with adjusted gross incomes of $200,000 for single taxpayers, and $250,000 for Married Filing Jointly taxpayers. The tax is applied to investment income only. It is calculated on the lesser of total investment income, or investment income in excess of the threshold. Many people believe the profit on the sale of their home is subject to the tax. The fact is that only the taxable profit is subject to the tax. For singles, only the profit that exceeds $250,000 is taxable, and becomes subject to the 3.8% Medicare tax. For married filing jointly taxpayers, only profit that exceeds $500,000 becomes subject.
We at CPA Accounting and Tax Solutions know there are dozens of scary rumors, and misinformation flying around. Before you make any sudden financial decisions based on bad information, call us at 239-596-6050. We will give you the facts.