Part 1 Taxation: AMT, Self-Employment Tax and Other Taxes question: Kim earned

Part 1Taxation: AMT, Self-Employment Tax and Other Taxes

Kim earned $230,000 of wages from one employer in 2025; her husband earned $10,000. They file jointly. Which statement is correct?

A Her employer withholds nothing, as they are under $250,000
B The employer must withhold 0.9% on all of her wages
C Her employer withholds 0.9% on her wages over $200,000, but they owe none
D They owe 0.9% on $30,000 of her wages

Show the answer and explanation

Answer: C. Her employer withholds 0.9% on her wages over $200,000, but they owe none

An employer must withhold Additional Medicare Tax on wages paid to an employee over $200,000 in a year, regardless of filing status. The tax itself applies to combined wages over $250,000 for joint filers. Kim and her husband have $240,000, so they owe none, and the $270 withheld is credited on Form 8959. Source: IRC 3101(b)(2), 3102(f); Form 8959 instructions (2025). Tax year: 2025 (law as of 31 Dec 2025).

Common mistake

Assuming withholding follows the joint $250,000 threshold.

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Part 1 Taxation: AMT, Self-Employment Tax and Other Taxes question: Kim earned

Answer: C. Her employer withholds 0.9% on her wages over $200,000, but they owe none

Common mistake

Related Part 1 practice questions

Part 1 Taxation: AMT, Self-Employment Tax and Other Taxes question: Kim earned

Answer: C. Her employer withholds 0.9% on her wages over $200,000, but they owe none

Common mistake

Related Part 1 practice questions