@Anonymous wrote:
Could someone please answer this basic question?
Now lets say some one has only source of income via passive income like from stocks, dividends, capital gains (Net investment income). That person has NO Medicare tax until that person reaches 200/250/125 threshold.
No. If your only income is investment income then there is never any medicare tax reguardless of the amount of income. Medicare tax only applies to employment income - either W-2 or self-employed.
The "200/250/125 threshold" you refer to is when your W-2 box 5 amount plus Self-employed income on Schedule SE part 1, line 6 exceed those amounts. It has nothing to do with investment income whatsoever.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
