The Social Security Administration has announced an increase in
the Social Security taxable wage base in 2013 from $110,100 to
$113,700. The $3,600 increase is slightly more than the $3,300
increase from 2011 to 2012. The cap was just $106,800 from 2009 to
2011, as inflation ground to a halt during the economic
The wage cap is the maximum amount of compensation subject to
tax under the Federal Insurance Contributions Act (FICA) for old
age, survivors and disability insurance (OASDI) — typically
called Social Security tax. FICA imposes both Medicare tax and
Social Security tax on compensation received for services at
matching employer and employee rates (with self-employed taxpayers
effectively paying both shares on self-employment income). Although
the Social Security tax is capped, the Medicare portion of FICA tax
applies to total earnings, with no limit on the amount.
The Social Security tax rate is generally 6.2% for both
employers and employees, but under a special temporary provision it
is only 4.2% for individuals in 2012. The rate is scheduled to
revert to 6.2% in 2013 without legislative action. The maximum
total individual share of Social Security tax is capped at
$4,624.20 in 2012 but is scheduled to jump to $7,049.40 in 2013,
with a return to the 6.2% rate and the higher wage cap.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
21 Sep 2016, Webinar, Washington, DC, United States
Learn about tax developments and significant tax issues that can affect your financial statements, including accounting for income and non-income taxes. We will focus on the financial reporting implications of these developments.
4 Oct 2016, Webinar, Washington, DC, United States
This webcast will explore how your company’s enormous stockpile of data, both publically available and proprietary, might be used in high-value ways, not only for future risk planning purposes but also to help unlock answers to some of your key business issues and challenges.
Describe how large and midsize life sciences leaders are optimizing their approach by strategically using data analytics for competitive advantage to protect their reputations and maintain a solid standing with health authorities and the OIG
Demonstrate how to build a global lens into analytics by combining existing internal data sources (compliance and others) with external data sources (structured and unstructured data)
The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) accelerated the due date for filing Form W-2, Wage and Tax Statement and Form W-3, Transmittal of Wage and Tax Statements, and any returns or statements required by the IRS to report nonemployee compensation to January 31.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).