10 hidden taxes you didn't know you're paying 1.
Medicare tax: The amount withheld by your employer from your paycheck (often under the line item "FICA," which stands for Federal Insurance Contributions Act) helps kate spade discount store cover the cost of running the Medicare program, the federal system of health insurance for people over the age of 65. Employers pay one half of the FICA tax and employees pay the other half. The employee contribution is 6.2 percent for Social Security and 1.45 percent for Medicare on wages up to $110,100. The temporary payroll tax cut for tax years 2011 and 2012 reduced the employee portion for Social Security by 2 percent. 2. Self employment tax: A Social Security and Medicare tax for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. The : 12.4 percent for Social Security and 2.9 percent for Medicare (hospital insurance) on income up to $110,100. However, the temporary payroll tax cut for tax years 2011 and 2012 reduced self employment tax kate and spade outlet by 2 percent. You can deduct the employer equivalent portion of your self employment tax in figuring your adjusted gross income. This deduction kate spade black tote sale only affects your income tax. It does not affect either your net earnings from self employment or your self employment tax. 3. Alternative minimum tax (AMT): The alternative minimum tax was created in 1969 to ensure that kate spade outlet vs retail wealthy taxpayers pay at least some minimum amount of federal income tax, regardless of deductions, credits or exemptions. In essence, it is a flat tax with two brackets, 26 percent and 28 percent. The problem with AMT is that it now ensnares not only the wealthiest Americans, but 4 million to 5 million taxpayers with annual incomes between $200,000 and $1 million. Congress has yet to approve a new inflation "patch" that would allow millions to escape AMT (the last patch expired in December). If a new one is not enacted, the AMT will hit 31 million taxpayers this year, reaching deeply into the middle class. View all articles by Jill Schlesinger on CBS MoneyWatch Schlesinger, CFP is the Emmy nominated, Business Analyst for CBS News.
She covers the economy, markets, investing and anything else with a dollar sign on TV, radio (including her nationally syndicated radio show), the web and her blog, "Jill on Money." Prior to her second career at CBS, Jill spent 14 years as the co owner and Chief Investment Officer for an independent investment advisory firm. She began her career as a self employed options trader on the Commodities Exchange of New York, following her graduation from Brown University.