While the benefit increase is small, SSI recipients had no cost-of-living adjustment in due to low inflation. Social Security benefits rose by 1. Information about Medicare premium increases for , when released, will be available at www. For many SSI recipients, their Social Security increase is likely to be offset by higher Medicare premiums, which could be even steeper for those covered by Medicare Part B if they have delayed taking Social Security because they are still working, for instance.
For those claiming Social Security before reaching their full retirement age age 66 for people born in through , benefits are limited if they continue to work and receive earned income.
These factors should be pointed out to employees who also are Social Security income recipients. A separate earnings test applies in the year an individual reaches full retirement age. Income tax bracket adjustments for tax year were issued on Oct. The level of income that is subject to a higher tax bracket can influence a number of decisions by employees, including how much salary to defer into a traditional k plan, which reduces taxable income for a given year by the amount contributed, or whether to participate in a nonqualified deferred income plan, if that option is available through the employer.
A comparison of income tax rates and ranges for and follows below. Single Filing Individual Return other than surviving spouses and heads of households. Married Filing Jointly and surviving spouse.
Married Filing Separate Returns. Heads of Households. Revenue Procedure also states that among other income tax adjustments for Pay raises in the U. You may be trying to access this site from a secured browser on the server. Please enable scripts and reload this page. Reuse Permissions. There's no employer match for Additional Medicare Tax. Only the social security tax has a wage base limit.
The wage base limit is the maximum wage that's subject to the tax for that year. Refer to "What's New" in Publication 15 for the current wage limit for social security wages; or Publication 51 for agricultural employers. This brings the total FICA tax rate to Self-employed individuals are considered to be both the employer and employee, and are therefore responsible for paying both parts of the tax, which is collectively known as the self-employment tax.
Essentially, any income you earn is subject to FICA taxes. This includes salaries, wages, tips, bonuses, freelance income, and income from a business that you own and actively participate in. FICA taxes are not assessed on passive income, such as dividends, interest, and royalties. I mentioned earlier that Social Security and Medicare aren't as financially solid as they should be. You can read thorough discussions of the financial problems facing these programs at these links for Social Security and Medicare , but the general idea is that with the baby boomer generation retiring over the next decade and a half, fewer people will be paying FICA taxes per covered beneficiary than ever before.
As a result, both programs are expected to start running deficits, which will continue for the foreseeable future. Eventually -- in for Social Security and for Medicare -- both will be completely out of reserves and will need to make across-the-board benefit cuts. The exact reform package that will be passed is anyone's guess at this point, but history tells us that something will be done.
For , the FICA tax rate for employers is 7. For , an employee will pay: a. For , the self-employment tax imposed on self-employed people is: Facebook Twitter Linkedin Email. Learn more and take a free trial.
0コメント