Howard Kossover: Monthly Social Security, SSI payments to go up for 63 million people
Q: What is the maximum amount of Social Security taxable earnings for 2014?
A: Related to the 2014 cost-of-living-adjustment, the maximum amount of earnings subject to Social Security tax will be $117,000 in 2014, up from $113,700 in 2013.
You will not see a change in Social Security tax paid unless working in 2014 and earning over the 2013 taxable earnings base of $113,700.
People pay payroll taxes up to the annual maximum for wages or self-employment income covered by Social Security.
This continues even when a person receives SSA benefits.
The taxable earnings amount has changed frequently over the years but tax rates have not.
See taxable earnings amounts from 1937 to 2014 at www.socialsecurity.gov/planners/maxtax.htm#maxEarnings.
Tax rates are at www.socialsecurity.gov/OACT/ProgData/taxRates.html.
Medicare payroll tax does not have a maximum taxable base limit.
It continues for all applicable wage and self-employment income during the year even after Social Security tax ends.
If you have more than one job in a year, each employer must withhold Social Security taxes from your wages without regard to what the other employers have withheld.
A result is that you may potentially have Social Security taxes withheld that exceed the maximum.
You can claim a refund of the overpaid taxes when you file your personal income tax return with the Internal Revenue Service.
Dating back to 1939 legislation, the Federal Insurance Contributions Act (FICA) is the official name for Social Security payroll tax in the Internal Revenue Code.
Whether called FICA or Social Security payroll tax, it is the same thing.
Employers: Has your business registered to use the free Social Security Business Services Online (BSO) yet?
Services include two ways to electronically file W-2s plus the Social Security number verification service (SSNVS) for online verification of employee Social Security numbers.
Third-party preparers register once, and not for every client they represent.
Register now to transmit your 2013 W-2 data electronically. Learn more and register at www.socialsecurity.gov/pgm/business.htm.
Based in Grand Forks, Howard I. Kossover is the Social Security Public Affairs Specialist for North Dakota and western Minnesota. Send general interest questions to him at firstname.lastname@example.org. Read his online articles at socialsecurityinfo.areavoices.com.