What is IRS Form 8959?

50 views 0 replies
Reply to Topic

Age: 23
Total Posts: 49
Points: 10

New York, United States
If you are a taxpayer with a self-employment income, you will have to fill out the IRS Form 8959. For this, the total of your self-employment earnings and wages or the RRTA compensation has to be more than the threshold amount for your filing status.
The Additional Medicare Tax only applies to the portion of your employment, self-employment, and railroad retirement earnings that exceed the income thresholds for your filing status. You can find these thresholds in the instructions for Form 8959.
Form 8959 consists of three parts. Each part includes a short calculation to figure out how much Additional Medicare Tax you owe if any. You complete only the part of the form that applies to the type of income you received.
Fill out Part I if you received W-2 income.
Fill out Part II if you received self-employment income.
Fill out Part III if you received RRTA
If you have more than one type of income, such as W-2 income and self-employment income, you will have to complete all sections that apply. Once you complete Form 8959 and figure out the total Additional Medicare Tax you're responsible for, the final section of the form subtracts the tax you paid through withholding and estimated tax payments to determine if there is any Additional Medicare Tax due—which ultimately gets reported on your 1040 form.
If you paid too much based on your filing status, your employer cannot stop withholding your Additional Medicare Tax. However, overpayments are applied against the tax owed on your annual income tax filing and could lead to a tax refund.
At this point, you must have realized the importance of a tax professional. But this does not mean that you should start making Google searches like ‘Tax Preparation Services Near Me’. The reason for this is, you can consider taking help from a virtual bookkeeping service provider. Not sure how to get started? You can call us on +1-888-660-0575 We are available 24x7.
Posted 18 Nov 2020

Reply to Topic