By Tom Bowen, CPA
The Social Security Administration (SSA) recently announced a 2017 cost-of-living adjustment for the Social Security taxable wage limit. The maximum amount of earnings subject to Social Security tax for 2017 will increase by 7% to $127,200 from $118,500 in 2016.
The Federal Insurance Contributions Act (FICA) imposes two taxes on employers, employees, and self-employed workers. The first one is for Old Age, Survivors and Disability Insurance (OASDI or Social Security tax) and the second one is for Hospital Insurance (HI or Medicare tax).
The employer matching rate for 2017 remains unchanged with the FICA tax rate being 7.65% which consists of 6.2% for Social Security tax and 1.45% for Medicare tax.
For 2017, an employee will pay:
For 2017, a self-employed person will pay:
For more information or questions on this adjustment, please contact your local UHY LLP professional, or visit us on the web at www.uhy-us.com.