IRS Form 8959

irs form 8959
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The United States residents pay taxes in accordance with progressive taxation principles; so, if a resident has a certain level of income, they might pay more taxes than other people. Particularly, this applies to the Medicare taxes, paid additionally for being a participant of the Medicare program. This program is widely used by citizens older than 65 years old, along with some younger people with disabilities and severe health issues.

Almost ten years ago, the US Internal Revenue Service (or IRS) introduced another tax: Additional Medicare Tax that applies to all residents who have gone over a specific borderline in their incomes. For taxpayers who are single, the borderline is 200,000 US dollars (they will file the 8959 form if they earn more than this), and for married people, it is 125,000 dollars (if a couple submits these forms separately) or 250,000 dollars (if they file together). The Service promises these sums will not change year to year, and the inflation will not affect them.

Basically, there are three types of income that count if a person asks whether they should file IRS Form 8959: specific income reflected in the person’s W-2 form; income they received throughout the year as a self-employed specialist; and finally, income from railroad retirement compensation.

To get additional information about the requirements that apply to filers and peculiarities about the earned amounts, you can go through the Service’s instructions to the form. It would be great if you also read IRS Publications: 15 (Circular E), 505, 531, and 555. To get the general idea about the form and its completion, move to the next part, where we have added a brief guide describing the form’s sections.

How to Fill Out the Template

The template might seem difficult to fill out even though there is only one page. You will have to choose which lines apply to you and make plenty of calculations to fill them all out. In case of any doubts, taxpayers are recommended to hire a tax expert who will help them with the document creation.

It does not matter who will fill out the form, you or a paid specialist; you have to prepare your completed tax forms that are relevant (your tax return, 4137, 8919, and W-2). Having your bank statement and all receipts showing all income throughout the year at hand is also a smart move.

If you have decided to fill out the template individually, check our guide about the form completion below. Besides, you will need to get the Service’s instructions on its site. They will help to clarify difficult moments and give you all peculiarities about the template.

Get the Template

Check the year written on the top of the first page. IRS normally updated the majority of its forms. Even if the content remains the same, sometimes a tiny little thing might change; that is why it is crucial to have the current version.

Those who notice that their template is incorrect or have no template at hand can use our form-building software. This user-friendly system allows you to get any legal form you are looking for in just a moment. Besides, all forms released by the Service, including IRS Form 8959, are available on the official institution’s site.

Insert Your Name and SSN

This document is going to be a part of your tax return; even so, you have to write your name and social security number (SSN), so the Service personnel does not get confused when reviewing a bunch of your papers.

On the left, write your name (it must coincide with the name you added to your return). On the right, insert your SSN.

step 2 - insert your name and ssn - filling out irs form 8959

Pick the Part to Complete

You have to select the form’s block that is relevant for you: the first for the income showed in W-2 Form (Medicare wages), the second for the income you have gained from being self-employed, and the third — for railroad retirement compensation (Railroad Retirement Tax Act, or RRTA). It is possible to complete two parts; you have to check the borderline of your income with the Service’s chart in its instructions.

Complete Part I (If Applicable)

You have to take your W-2, 4137, and 8919 forms and add the required figures from them. Then, add all the numbers and put the result in line 4.

Specify your status below by entering the sum in US dollars written in the template (you can file the document together with or separately from your spouse or be single and file on your own). Then, take this sum, subtract the number from line 4, and write the result (you can get zero or less; the template shows what to write in this case). Multiply the number you have received by 0,009 and enter the result in line 7. Move to the second block, then.

step 4 - complete part i (if applicable) - filling out irs form 8959

Count the Tax on Income from Self-Employment

Insert the required number from Schedule SE of your tax return. Define your status in the next line (married and filing together or separately, or individually). Then, line by line, compute the numbers as demanded and define your additional tax in line 13. Scroll down to the third part.

step 5 - count the tax on income from self-employment - filling out irs form 8959

Compute the Tax from RRTA Compensation

If this compensation applies to you, complete Part III of the form. Take the needed numbers from form W-2 and insert them in line 14. Again, define your status by stating the sum in dollars. From this sum, subtract the number from line 14 and write it as a final result for the section (in line 16).

step 6 - compute the tax from rrta compensation - filling out irs form 8959

Calculate the Total Tax

You have to determine the total sum of your additional Medicare tax. Add the mentioned numbers from previous parts and insert the result in line 18. Also, enter this number in other forms mentioned here.

step 7 - calculate the total tax - filling out irs form 8959

Consider Withholding

A part of the tax might be withheld by your employer. Fill out the last section with the numbers from the W-2 form and the demanded calculations. Lastly, enter the final result with withholding in line 24. Do not forget to enter the same number in your tax return.

step 8 - consider withholding - filling out irs form 8959

Filing Procedures

The Service expects this form from taxpayers only if it is attached to their tax returns. Otherwise, filers do not have to submit the form.

Your tax return must be sent every year; the deadline might vary slightly. You should prepare all forms, schedules, and other linked papers and send them no later than April 15. If you do not do it on time, penalties may follow. There is a way to ask for a postponement; check the Service’s guide answering how to do it.

You can file the whole document package either digitally or by regular mail. If you go for the online process, your papers probably will be processed much faster. If you send the papers via a post office, ensure that the address you are sending to is correct (again, always check the Service’s site).