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

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

Today we will talk about summer jobs for high school and college students. Summer jobs offer students the opportunity to learn about the working world and taxes. As a new employee, they’ll need to fill out a Form W-4 or Employee’s Withholding Allowance Certificate. Employers use this form to figure how much federal and state income tax to withhold from workers’ paychecks. It is important to complete your W-4 form correctly so the employer withholds the right amount of taxes

We talked about this in previous editions of this video blog. But many people have overlooked this topic. I have talked with both employers and employees over the last couple of weeks who failed to consider this change. On January 1, 2013, the 2% temporary reduction in the payroll tax that was in effect in 2011 and 2012 expired. The social security tax reverted back to 6.2%. This was never intended to be a permanent change. But rather a short-term method to put additional mo

Today’s topic is a brief listing of various tax issues that Congress needs to address in the near future. These are issues that may be affected by the election. Before we go to that list, have you voted yet? Here are some of the items scheduled to expire at the end of 2012: The Bush era tax cuts will expire. This will cause an increase in all tax brackets and the elimination of the 10% bracket. It will also increase the long term capital gain rate to 20% and eliminate the 15%

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.