FICA/Medicare Taxes

Fica is Social Security. Medi is medicare. Different. Too much.

 

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.

 

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.

 

I forget that they list things differently sometimes......back in the day.

 

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!