Small Businesses: Increased Medicare withholding. Businesses will be required to withhold taxes for Medicare Part A at a higher rate for those who earn more than $200,000 annually ($250,000 for married couples filing jointly). At present the Medicare payroll tax is 2.9%, with the worker and the employer each paying 1.45%. Under the new rule, starting in 2013 high-income individuals will pay an added 0.9%-increasing their share of the tax to 2.35% of their wages.
David Armes, CFP, MBA, is founder of Dover Financial Planning, a fee-only financial planning firm based in Long Beach, Calif., that analyzes the costs and coverage of Medicare and other health insurance options.