Social Security taxes for 2014 will remain at the same rate as last year, but the maximum taxable earnings will increase slightly based on official data published by the Social Security Administration and reported by the Huffington Post on January 1, 2014.
The Social Security tax rate will remain at 6.2 percent for the 2014 year. Medicare tax will remain at 1.45 percent, for a combined total tax of 7.65 percent. Self- employed individuals will have to pay double, or 15.3 percent, and employers will have to match the tax, dollar for dollar, much like in the past.
The maximum taxable income subject to Social Security tax will increase to $117,000. This means that, should you be so fortunate to earn more than $117,000 in 2014, you will no longer pay any more Social Security tax for the remainder of the year. At 6.2 percent, this means the maximum Social Security tax for individuals to pay and employers to match is $7,254.00. This increase in the maximum taxable income will add up to millions more dollars for the IRS and more money to fund benefits and other programs.
The maximum taxable income last year was $113,700. It is normal for the maximum to increase slightly each year, so this small increase shouldn’t surprise anyone. Medicare taxes have no limit- individuals have to pay 1.45 percent regardless of income and employers have to match it, dollar for dollar, without limit.
As for Social Security benefits paid, the SSA did enact a small 1.5 percent cost of living adjustment for 2014. The increase is small and slightly less than the 2013 increase of 1.7 percent, but still far better than the zero increase in 2010 and 2011.
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