The Social Security Administration announced that the wage base for computing the Social Security tax (OASDI) in 2017 will increase to $127,200, which is up from $118,500 in 2016. The Social Security Act provides for an automatic increase in Social Security and Supplemental Security Income (SSI) benefits if there is an increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Federal Insurance Contributions Act (FICA) imposes two taxes on e

For the past couple of months, we've been informing you of important tax law updates and information for 2016. In this post you will find information on all those topics in one place. Health Savings Account Limits The IRS has provided the annual inflation-adjusted contribution, deductible, and out-of-pocket expense limits for 2016 for health savings accounts (HSAs). Eligible individuals may, subject to statutory limits, make deductible contributions to an HSA. For calendar ye

Today we will discuss the Social Security wage base for 2016. The Social Security Administration has announced that the wage base for computing the Social Security tax (OASDI) in 2016 will remain at $118,500, unchanged from 2015. The Social Security Act provides for an automatic increase in Social Security and Supplemental Security Income (SSI) benefits if there is an increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). As determined by th

Today we will address the updated Social Security wage base for 2014. The Social Security Administration has announced that the wage base for computing the Social Security tax in 2014 increases to $117,000 from $113,700, which was the wage base for 2013. The $3,300 increase, which is about 2.9%, is due to an increase in average total wages. The Federal Insurance Contributions Act (FICA) imposes two taxes on employers, employees, and self-employed workers—one for Old Age, Surv

Due to several recent client inquiries, today we are going to revisit the topic regarding increased hospital insurance tax (Medicare tax). This tax was a result of health care reform legislation. It affects high income earners and the employers of those same individuals. For tax years beginning after December 31, 2012, an additional 0.9% Medicare tax applies to wages received with respect to employment in excess of: $250,000 for joint returns; $125,000 for married taxpayers

The Federal Insurance Contributions Act, or FICA, is made up of the Social Security Tax and the Medicare Tax. For both employees and their employers, on the first $113,700 of their wages (up from $110,100 in 2012) they will each be taxed 7.65% (an increase of 2% from the prior year). For the self-employed, they will be taxed 15.3%. The self-employed are taxed at a higher percentage because they pay the full FICA tax, while the employee and employer each contribute to the tax.