Social Security Tax to increase in 2007
The Social Security Administration recently announced that the Social Security tax (OASDI portion) wage base will be increased to $97,500 for the year 2007. Read the press release.
The Federal Insurance Contributions Act (FICA) imposes two taxes on the wages earned by employees & the self-employment income earned by business owners. The Medicare tax (Hospital Insurance) is 2.9% of all earnings with no maximum. The Social Security tax (Old Age, Survivors & Disability Insurance or OASDI) is 12.4% on earnings up to a maximum amount set by the Social Security Administration each year. The tax rates have been the same since 1990, but the wage base for the OASDI portion has consistently increased over the years.
For 2006, the OASDI wage base caps out at $94,200 which means the maximum Social Security Tax that can be imposed on any individual is $11,680.80 ($94,200 x 12.4%). The new wage base for 2007 will result in a maximum OASDI tax of $12,090 ($97,500 x 12.4%) on anyone earning at least $97,500. This is a tax increase of $409.20.
The Federal Insurance Contributions Act (FICA) imposes two taxes on the wages earned by employees & the self-employment income earned by business owners. The Medicare tax (Hospital Insurance) is 2.9% of all earnings with no maximum. The Social Security tax (Old Age, Survivors & Disability Insurance or OASDI) is 12.4% on earnings up to a maximum amount set by the Social Security Administration each year. The tax rates have been the same since 1990, but the wage base for the OASDI portion has consistently increased over the years.
For 2006, the OASDI wage base caps out at $94,200 which means the maximum Social Security Tax that can be imposed on any individual is $11,680.80 ($94,200 x 12.4%). The new wage base for 2007 will result in a maximum OASDI tax of $12,090 ($97,500 x 12.4%) on anyone earning at least $97,500. This is a tax increase of $409.20.
posted by Unknown at 10/26/2006 09:20:00 AM
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