1. Welcome to Baptist Board, a friendly forum to discuss the Baptist Faith in a friendly surrounding.

    Your voice is missing! You will need to register to get access to all the features that our community has to offer.

    We hope to see you as a part of our community soon and God Bless!

FICA/Medicare Taxes

Discussion in 'Money Talk$' started by Gina B, Dec 30, 2013.

  1. Gina B

    Gina B Active Member

    Joined:
    Dec 30, 2000
    Messages:
    16,944
    Likes Received:
    1
    I'm a little old to be asking this, but I've not been able to find the answer to it despite looking in a lot of places and never really was that interested before.

    Why are both taken out separate on paychecks? I thought FICA paid for both social security and Medicare, so why take Medicare out twice? Is the one that is take out purely for Medicare supposed to count towards a person's own Medicare payments, while the money in FICA goes towards everyone?
     
  2. SaggyWoman

    SaggyWoman Active Member

    Joined:
    Dec 15, 2000
    Messages:
    17,933
    Likes Received:
    10
    Fica is Social Security. Medi is medicare. Different. Too much.
     
  3. InTheLight

    InTheLight Well-Known Member
    Site Supporter

    Joined:
    Dec 17, 2010
    Messages:
    24,988
    Likes Received:
    2,268
    Faith:
    Baptist
    What do you mean by "Medicare is taken out twice?"

    There are two components to FICA and Medicare, the employer contribution and the employees contribution. FICA is 6.2% of gross pay and Medicare is 1.45%. Combined amount is 7.65%. You have 7.65% withheld from your paycheck which gets paid to the government and your employer pays 7.65% to the government.

    Both FICA and Medicare dollars go into a general fund. There is no direct account where each persons withholding gets placed into.
     
  4. Gina B

    Gina B Active Member

    Joined:
    Dec 30, 2000
    Messages:
    16,944
    Likes Received:
    1
    I'm saying twice because FICA is said to be something that pays for both Social Security AND Medicare.

    It does equal 7.65%

    Maybe I'm just confused by the wording used. When talking about this tax, they say "the medicare portion of the FICA tax..." which leads me to believe that FICA is one tax that pays for SS and Medicare, and the Medicare tax listed under it is a separate tax apart from FICA. If it's the same tax, they could indent it under FICA to show it's part of it and not different.
     
  5. Zenas

    Zenas Active Member

    Joined:
    May 7, 2007
    Messages:
    2,704
    Likes Received:
    20
    In the old days the two were lumped together into one tax called FICA. There was an upper limit of wages, above which there was no FICA tax. I don't recall what that was but probably around $75,000. Any money made above that upper limit was not subject to FICA tax. Then about 1990, give or take five years or so, they separated Social Security and Medicare payroll taxes. Today, there is still an upper limit on the amount of earnings subject to Social Security tax. It is presently $113,700. However, no such upper limit exists for Medicare. If you made $1,000,000 per year all of it would be subject to the Medicare tax. And that is why they are witheld separately.
     
  6. Gina B

    Gina B Active Member

    Joined:
    Dec 30, 2000
    Messages:
    16,944
    Likes Received:
    1
    Thank you Zenas! I get it now. They sure don't make that information easy to find online.

    While I was searching, I ran across info that they already raised Medicare taxes for those above a certain income level to help pay for the ACA. I had thought they held off on doing that. It will certainly make a mess of things if it were to end up being repealed. http://www.irs.gov/Businesses/Small...s-and-Answers-for-the-Additional-Medicare-Tax
     
  7. SaggyWoman

    SaggyWoman Active Member

    Joined:
    Dec 15, 2000
    Messages:
    17,933
    Likes Received:
    10
    I forget that they list things differently sometimes......back in the day.
     
  8. OldRegular

    OldRegular Well-Known Member

    Joined:
    Nov 21, 2004
    Messages:
    22,678
    Likes Received:
    64
    If I am correct when Medicare was first enacted there was no distinction between the Social Security Component and the Medicare component. That distinction was made some years later and I don't recall when!
     
Loading...