For Married Filing Jointly (MFJ), the Medicare tax is 1.45% up to $250k income and then after that it adds another 0.9%. Speaking with our payroll company, they said I am taxed as a "single" where it is 1.45% up to $200k and then an additional 0.9% thereafter. Our payroll company says all payrolls are taxed this way for medicare regardless of what is claimed on the W4 or the filing status, and they cannot adjust or correct it, it is up to the filer during the filing process. The $50k difference is $450, if I file MFJ, but I am taxed as a Single. Does Turbotax provide a correction for this when I file my taxes, or is there a way this is corrected during my filing?
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Yes, TurboTax will automatically correct the excess Medicare withholding on your tax return. It will include Form 8959 in your tax return to calculate the correct amount of Additional Medicare Tax that you have to pay, and include that in your total tax. The full amount of Additional Medicare Tax that was withheld from your pay will be added to your federal income tax withheld. The result is that you will pay only the correct amount, and the excess $450 that was withheld will be credited towards your income tax. This is how the IRS requires it to be handled.
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