Why FICA Tax?


In my reports Details>Taxes page, FICA taxes appear after my wife and I turn 70. We will have no income from labor (last labor earnings entry was for 2011), just from investments, pensions and social security. What is meaning of the FICA entries?




dan royer's picture

It's probably 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.

Thanks, Dan. That appears to be the case. It is worth noting that the various thresholds of this tax are not indexed to inflation, so I had to escalate (by the inflation assumption)the future years' income in order to confirm the ESP calc manually.
-- Mike

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