FICA taxes generated from Special Receipts entered as Ordinary Income

Submitted by dfuhrman@nwmllc.com on Fri, 12/26/2014 - 12:56

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special receipts

I'm entering Special Receipts from oil & gas royalty payments for 2014-2018. Since these royalty payments are taxable, albeit subject to complex depletion allowances, I've selected Ordinary Income. However, that appears to cause ESPlanner to generate FICA taxes, which I believe is not correct. Is there a better way to model taxable royalty income w/o generating FICA taxes? In this case, there are no other income sources that would generate FICA taxes.

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dan royer's picture

dan royer

Fri, 12/26/2014 - 15:16

Are you sure that you are not

Are you sure that you are not seeing the Unearned Income Medicare Contribution tax? This is a new tax that treats unearned income over $250,000 the same as earned income over $250,000. Since this is a Medicare Part A tax, we report it as FICA.

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dfuhrman@nwmllc.com's picture

dfuhrman@nwmllc.com

Mon, 12/29/2014 - 16:22

thanks, Dan. That occurred

thanks, Dan. That occurred to me as well, assuming ESPlanner puts that tax into the FICA amount.

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