CSS Profile: What is a Form 8959 - Additional Medicare Tax?
The CSS Profile is becoming more and more popular among colleges. More and more schools require the CSS Profile for financial aid consideration. The CSS Profile is much longer than the FAFSA, as colleges dig deeper into a family’s financial picture to determine the amount of institutional financial aid to offer. One section of the CSS Profile is related to a family’s taxes. Within the tax section, different 1040 tax schedules and forms are considered. We’ll learn more about Form 8959 - Additional Medicare Tax and how it applies to the CSS Profile.
CSS Profile & 1040 Form 8959 - Additional Medicare Tax
Let’s take a look at what a Form 8959 is and how it applies to the CSS Profile.
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What is a 1040 Form 8959 - Additional Medicare Tax?
Form 8959 is a tax form used to calculate and report the Additional Medicare Tax owed by certain taxpayers. The Additional Medicare Tax is a 0.9% tax on wages, compensation, and self-employment income above a certain threshold amount.
For tax year 2021, the threshold amounts for the Additional Medicare Tax are as follows:
$200,000 for single filers
$250,000 for married filing jointly filers
$125,000 for married filing separately filers
Taxpayers who earn wages, compensation, or self-employment income above these threshold amounts are required to pay the Additional Medicare Tax.
Form 8959 is used to calculate the Additional Medicare Tax owed and to report it on the taxpayer's annual income tax return (Form 1040). It is important to note that the Additional Medicare Tax is not withheld by employers and must be paid by the taxpayer directly to the IRS. If a taxpayer has multiple employers during the year and their wages, compensation, or self-employment income does not exceed the threshold amounts, they may be able to claim a refund of the Additional Medicare Tax when they file their tax return.
Form 8959 - Additional Medicare Tax & Completing the CSS Profile
In the Parent Tax Schedules and Forms section, the CSS Profile asks families which schedules and tax forms they completed. Based on the response to this question, additional questions will be populated. If you select that you did complete Form 8959, you will be asked additional questions related to the type of income and adjustments reported on your Form 8959.
How to Use Form 8959 to Complete CSS Profile Requirements
The CSS Profile does a good job overall when it comes to making it clear what questions they are asking and where you need to go to find the answers, especially related to your tax return. You can use the guidance provided on the CSS Profile to determine which lines to check in order to complete the corresponding questions on the CSS Profile.
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There is a lot to be gained from our free general financial aid advice, but it’s also a very individual process. If you have remaining financial aid questions, email us to discuss more or book an individual session.