Maximize Your 401k Contributions in 2024: A Guide with Calculator
New updates to the 2023 and 2024 401k contribution limits. Use a free paycheck calculator to gain insights to your 401k and financial future.
In a recent article, we covered FICA and what exactly it entails. One of the items mentioned was a Social Security Wage Base that applies to workers that earn over a specific amount of money. This morning, October 22, the IRS announced important changes to this wage base for the year 2015.
In a recent article, we covered FICA and what exactly it entails. One of the items mentioned was a Social Security Wage Base that applies to workers that earn over a specific amount of money. This morning, October 22, the IRS announced important changes to this wage base for the year 2015.
The wage base for Social Security will increase $1,500 to $118,500 in 2015, from $117,000 in 2014. The Medicare tax will be the same as prior years, with all wages being subject to the 1.45% tax. Also as in prior years, the earners making more than $200,000 in 2015 with be subject to the extra 0.9% Medicare tax.
The percentage values of both components of FICA will not change in the year 2015 – Social Security will still be withheld at a rate of 6.2% up to the wage base, and Medicare will be withheld at a rate of 1.45%. Regarding the new wage base, the maximum amount of Social Security tax employees and employers will pay in 2015 is $7,347.00, up $93.00 from 2014.
The wage base is the same for self-employed people, but there will be no limit on the Medicare tax of self-employed individuals. This means that the self-employment tax rate will be 15.3% (remember, self-employed individuals are responsible for both the employee contribution, and the employer contribution) up to the Social Security wage base of $118,500. The maximum amount withheld from a self-employed person will be $14,694 in 2015.
For more information on the wage base increase, please click here.
Do you need to stay updated on tax news and information? Visit insights, and always be up-to-date on payroll news!
New updates to the 2023 and 2024 401k contribution limits. Use a free paycheck calculator to gain insights to your 401k and financial future.
Unlock the secrets of your 2023 bonus taxes with our guide, and use our Bonus Pay Percent Calculator for an instant breakdown of your take-home pay.
It’s the 2023 holiday season, and for fortunate employees, that means an end-of-year bonus! Yet many employees are disappointed when their bonus lands in their bank – usually a lower amount than anticipated. Here's a quick guide to help workers understand how bonuses are taxed.