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Medicare and other income tax deductions..

Medicare and other income tax deductions..

Old Jul 10th 2016, 4:12 pm
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Default Medicare and other income tax deductions..

Hello,

I have recently started working in NYC and have received my first few paystubs and I have a few questions about my deductions.

Firstly, I can see a deduction of just under $100 a month for Medicare and I believe this is for a sort of health insurance for once you reach 65 and over. Since I am 28 years old and don't plan on retiring in the US (I am on a 3 year work visa), can I opt out of these deductions? I would much rather this cost go in to my current healthcare plan.

Secondly, when I filled out my W2 form, I mentioned I was married and that we would file as a joint entity as I am the only one currently working while my spouse searches for a job. Does this mean I am paying more/less tax at all? Also, can I change this when my partner gets a job?

I know in the UK we have tax codes - is there a way to check that you are being checked the correct amount?

I have also been told that everyone in the US files their own taxes and I am to get myself a CPA which I am not so used to but that in my industry (fashion) we can keep receipts for relevant expenses that can be deducted when filing the tax return and thus perhaps get a rebate. What kind of expenses are deductible? Are there any helpful websites on this?

Thank you,
D.
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Old Jul 10th 2016, 6:04 pm
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Default Re: Medicare and other income tax deductions..

Nobody paying Medicare will get their money back 40 years down the line, that I feel pretty certain about. I think the last I saw it will be bankrupt in 10 years.
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Old Jul 10th 2016, 6:42 pm
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Default Re: Medicare and other income tax deductions..

Originally Posted by Boswortha View Post
Firstly, I can see a deduction of just under $100 a month for Medicare and I believe this is for a sort of health insurance for once you reach 65 and over. Since I am 28 years old and don't plan on retiring in the US (I am on a 3 year work visa), can I opt out of these deductions? I would much rather this cost go in to my current healthcare plan.
With the exception of some special provisions for people on J visas, you can't "opt out" of any US taxes including medicare, social security, federal, state and (possibly) local taxes.

Secondly, when I filled out my W2 form, I mentioned I was married and that we would file as a joint entity as I am the only one currently working while my spouse searches for a job. Does this mean I am paying more/less tax at all? Also, can I change this when my partner gets a job?
I think that you mean "W4" not "W2". The W4 is there to help your employer determine how much tax to withhold from your pay checks. You can file a new one with different information on it at any time. Note that this *only* determines your withholding. Your actual tax liability is calculated after the end of the tax year when you file your taxes. It may be more or less than the amount withheld - if it is more then you pay the difference when you file your tax return, if it is less you get a refund.

I know in the UK we have tax codes - is there a way to check that you are being checked the correct amount?
You need to estimate what your tax liability for the year is actually going to be and adjust your withholding accordingly. There are lots of online web sites that should help you to do that. Note, of course, that you should estimate both your state and federal tax liability (and that your state taxes can be used as a deduction against your federal taxable income).

I have also been told that everyone in the US files their own taxes and I am to get myself a CPA which I am not so used to but that in my industry (fashion) we can keep receipts for relevant expenses that can be deducted when filing the tax return and thus perhaps get a rebate. What kind of expenses are deductible? Are there any helpful websites on this?
You can generally deduct legitimate business expenses that are not reimbursed by your employer, but the rules surrounding what is and is not allowable are complex and that is an area where you might want to have at least a one time consultation with an accountant who is familiar with what the IRS considers to be deductible for your particular situation. Most people who are full time employees of a company have their expenses reimbursed by the company and have very few deductions for unreimbursed expenses.
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Old Jul 10th 2016, 7:22 pm
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Default Re: Medicare and other income tax deductions..

You can think of Medicare in the same way as the NHS, universal healthcare, but only for those 65 and older, and those that work are taxed to pay for for those currently on Medicare, just like your taxes in the UK pay for the folks currently getting healthcare through the NHS.

You will also see "FICA" taxes being deducted. This is for your your OAP, called Social Security in the USA. If you don't work and pay into it for 10 years (40 quarters) you won't qualify, so those are also taxes which you probably won't benefit from personally but cannot get out of.
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