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For example, younger persons who are still working probably arenât on Medicare and are still paying into the system by a rate of 6.2% of their annual earnings. Elderly persons on Medicare can use the IRS tax deduction to reduce their tax burden by claiming costs associated with Medicare payments.
Social Security and Medicare (FICA) Tax Deductions. FICA refers to the combined taxes withheld for Social Security and Medicare (FICA stands for the Federal Insurance Contributions Act). On your pay statement, Social Security taxes are referred to as OASDI, for Old Age Survivor and Disability Insurance. Medicare is shown as Fed Med/EE. Your FICA withholdings depend on the employee group you belong to: