Social Security Wage Base Increases
The Social Security wage base increases in 2017 to $127,200 up $8,700 from 2016. The Social Security tax rate on employers and employees remains at 6.2%. The employer’s share of Medicare tax stays at 1.45% of all pay. The employee’s share is 1.45% too, but they also pay the 0.9% Medicare surtax on wages that exceed $200,000 for singles and $250,000 for married couples filing jointly. This extra tax doesn’t affect employers; however self-employed individuals are subject to the surtax.
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Social Security Recipients will see a slight 0.3% hike in their benefits in 2017. The earning test limits are heading up too. People who turn 66 in 2017 do not lose any benefits if they earn $44,880 or less before they reach that age. One dollar in benefits will be withheld for every $3 in earnings above the limit.
There is no limit on earnings beginning the month an individual attains full retirement age (age 66 in 2017).
Individuals who are 62 through 65 by the end of 2017 can make up to $16,920 before they lose any benefits. One dollar in benefits will be withheld for every $2 in earnings above the limit.