Additional Taxes for the Wealthy to Hit from Next Year

Last updated on September 3, 2024

Starting 2025, there will be an increase in payroll taxes on wages and tax on investment including capital gains, dividends and interest. Apart from these additional taxes, the rich might see themselves paying more income tax starting next year if the Obama administration so decides. With the country looking straight at the fiscal cliff, the government is trying to get the most from taxes.

Economists estimate that the affluent fifth of households may see themselves paying $6,000 more from next year. For financing Medicare, both employers and employees will be contributing. They will each pay a hospital insurance tax equal to 1.4 per cent on all wages. Couples filing jointly will be paying $1,350 (0.9%) to Medical payroll tax if their wages are over $250,000. If a single woman or a single man earns $200,000, they would not owe additional Medicare payroll taxes. This time it is the unmarried who get the advantage.

These new taxes bring along problems of calculating payroll taxes. Most employers do not have knowledge about the wages of the spouse of their employees. If they put in incorrect information or disregard the spouse’s earnings in calculating Medicare payroll taxes, the employee may get into tax debt. The government suggests making estimated tax payments or asking employers to increase the amount of taxes withheld from each paycheck.

How the country will survive the fiscal cliff nobody can tell, but you will need to think a lot about taxes starting next year.