Biden Gives Proposes Additional Funding To Medicare

cargivier sitting with elderly man - pacific grove in home caregiving

President Joe Biden is about to release a budget proposal which would extend the solvency of a key Medicare trust fund by at least 25 years.  This would be funded by raising the Medicare tax on people earning more than $400K per year from 3.8% to 5.0%.  The tax would not only apply to earnings, it would be taxed on business income, self-employment income and investment income.  President Biden also said he would divert some taxes from the government’s general fund to a Medicare fund.  Reserves for Medicare’s hospital-insurance fund are only sufficient to fund it through 2028, at which point it would only cover 90% of hospital coverage.

Social Security Tips To Avoid Income Tax Surprises

Many seniors are surprised to find out that their Social Security benefits are taxable, and the bill can be significant.  The amount that is taxable for an individual earning $25K to $34K is 50%, while if you make more than $34K then 85% of your benefits are probably taxable.  What to do when you don’t want a surprise come April 15 is to fill out Form W-4V with The Social Security Administration requesting an amount to be withheld for taxes.  The choices are 7%, 10%, 12% and 22%.  These percentages apply to the full income, not the 50% or 85% that is taxable.    Most states, including California, do not tax Social Security income.

https://www.usatoday.com/story/money/columnist/powell/2021/03/17/2021-tax-season-are-social-security-benefits-considered-taxable-income/4717044001/