Increase in Social Security Wage Base for 2017

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The Social Security Administration (SSA) announced an increase in the maximum earnings subject to the Social Security part of the FICA tax. The wage base will increase from $118,500 to $127,200 for 2017. This means that the maximum Social Security tax that employers and employees will each pay will increase from $7,347.00 to $7,886.40 ($127,200 x 6.2%). For a self-employed person with at least $127,200 in net self-employment earnings the Social Security part of the self-employment tax will increase from $14,694.00 to $15,772.80 ($127,200 x 12.40%). The Medicare part of the FICA tax remains 1.45% of all earnings. In addition, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) will pay an additional 0.9% in Medicare taxes. Other 2017 rates and limits can be found at www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2017.html.

 
If you would like additional information or to discuss the topics mentioned, please contact Marie Jett, CPA at 317-260-4472 or mjett@greenwaltcpas.com.