The medicare taxes represent a reduction in gross to net pay for your paycheck and what goes in your pocket.
The medicare taxes do not reduce the amount of income that you have to pay income tax on, which is the amount that goes on your tax return. That amount is in box 1 of your W2 and how much medicare tax or social security tax you pay does not effect that amount.
Other than that you are absolutely correct about the medicare tax formula.
@sw324
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