Social Security Benefits Rise and So Does Your Wage Base

In 2015, the Social Security benefits rise 1.7%.  The earnings limits are on the rise too; individuals who turn 66 in 2015 do not lose any benefits if they make $41,880 or less before they reach 66.  Individuals between age 62 and 66 by the end of 2015 can make up to $15,720 before they lose any benefits.  There’s no earnings cap once a beneficiary turns 66.

On the other hand, the Social Security wage base limit increases this year to $118,500 (up $1,500 from 2014).  The Social Security tax rate imposed on employers and employees remains at 6.2%.

The Medicare tax stays at 1.45% of all pay, for both the employer and the employee.  Additionally, for those whose wages and self-employment income (combined) is over the income threshold, they will pay aMedicare surtax of 0.9% on the amount over the threshold.  Employers are required to withhold the additional 0.9% on the wages above the threshold.


Thresholds:


Single & Head of Household:  over $200,000
Married Filling Joint:  over $250,000
Married filing Single:  over $125,000

Self-employed individuals pay Social Security of 12.4%; Medicare of 2.9% and the additional Medicare surtax for 0.9% over their respective threshold.

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