Update: The social security tax ceiling for 2008 is $102, 000.
This little nugget of information is potentially useful for pretty much anyone earning a wage, but it’s especially important for those of us that are earning self-employment income. In case you weren’t aware, everytime you pay Social Security or Medicare taxes at your regular job (assuming you have one), your employer pays an equal amount on your behalf. But if you’re self-employed, you get to pay both shares yourself. And were not talking about a trivial amount of money, either. Social Security taxes currently stand at 6.2%, with Medicare adding another 1.45%. So self-employment income is subject to a 15.3% hit in addition to plain old income taxes. It’s not pretty.
But here’s the good news… If you make enough money, the Social Security part of that equation goes away. That’s right, in 2006 your Social Security taxes are capped such that you only pay on your first $94, 200 of income (it was $90, 000 in 2005, and climbs to $97, 500 in 2007). In my case, I’ll clear the bar based on my day job, which means that I’ll be able to avoid the the vast majority of self-employment tax on my other earnings. The reason that I won’t be able to avoid it entirely is that there’s no ceiling on the Medicare portion. Thus, I’ll still have to pay 2.9% (1.45% x 2) in addition to the plain old income taxes that I’ll owe.
Here’s another tip… If you worked more than one job during the year (as I did) it’s possible that you’ve overpaid your Social Security taxes… So when you get your W-2 forms, add up the values in Box 4 on each. If the total exceeds $5, 840.40 (6.2% of $94, 200) then you’re due a refund. The only catch is that you have to file IRS From 1040 (not 1040A or 1040EZ) to claim the overpayment.
And if you’re not currently in a position to benefit from this tax break, keep it in mind as you work your way up the payscale — it’s definitely something to shoot for.
Hat tip to FMF of FreeMoneyFinance for pointing out this ceiling to me the other day in an e-mail exchange about taxes.
I always spent my half an hour to read this weblog’s articles all the time along with a cup of coffee.
Wonderful goods from you, man. I have be mindful your stuff previous to and you are just extremely great. I really like what you’ve
acquired right here, really like what you’re stating and the way in which through which you say it. You’re making it entertaining and you continue to take care of to keep it
smart. I can not wait to read far more from you.
This is really a tremendous website.|
Magnificent website. A lot of useful information here.
I am sending it to some pals ans also sharing in delicious.
And certainly, thanks for your effort!|
Fantastic beat ! I would like to apprentice at the
same time as you amend your site, how could i subscribe for a blog website?
The account aided me a appropriate deal.
I were tiny bit acquainted of this your broadcast provided vivid clear concept|
Very rapidly this web page will be famous among all blog people, due
to it’s good articles or reviews|
excellent points altogether, you just won a new reader. What would you suggest in regards to your publish that you just made a few days in the past? Any certain?|
Generally I don’t learn article on blogs, but I wish to say that this write-up very forced me to check out and do it!
Your writing taste has been amazed me. Thanks, quite nice post.
|
wonderful put up, very informative. I ponder why the other specialists of this sector don’t notice this. You must continue your writing. I’m confident, you have a huge readers’ base already!|
hey there and thank you in your info ? I have definitely picked up anything new from proper here. I did then again experience a few technical issues using this website, since I experienced to reload the site many times previous to I may just get it to load properly. I were pondering if your web host is OK? Not that I’m complaining, however slow loading
circumstances occasions will very frequently impact your placement
in google and can harm your high-quality rating if
advertising and marketing with Adwords. Well I’m adding this RSS to my e-mail and could glance out for much more of your respective fascinating content. Make sure you replace this once more very soon..|
What i don’t realize is in reality how you are not actually a lot
more smartly-favored than you might be now.
You are very intelligent. You know therefore considerably in terms
of this topic, made me for my part believe it
from so many numerous angles. Its like men and women aren’t interested except it is something to accomplish with Woman gaga! Your own stuffs great. At all times handle it up!|
I was recommended this blog by my cousin. I am now not certain whether this publish is written by way of him as no one else realize such specified about my trouble. You are amazing! Thanks!|
Hello There. I discovered your weblog the usage of msn. This is an extremely smartly written article. I will make sure to bookmark it and return to read extra of your helpful information. Thanks for the post. I’ll certainly return.
|
When someone writes an paragraph he/she maintains the idea of a user in his/her mind that
how a user can be aware of it. Therefore that’s why this piece of writing is amazing. Thanks!|
Thanks in favor of sharing such a nice thought, piece of writing is good, thats why i have read it completely|
Wow! Finally I got a website from where I be able to in fact take valuable facts regarding my study and knowledge.|
Thankfulness to my father who shared with me concerning this webpage, this blog is in fact remarkable.|
Post writing is also a fun, if you be acquainted with after that you can write or else it is complicated to write.|
Remarkable! Its really awesome post, I have got much clear idea about from this paragraph.|
When some one searches for his necessary thing, thus he/she desires to be available that in detail, therefore that thing is maintained over here.|
Very nice article, just what I needed.|
My brother suggested I would possibly like this blog. He was once entirely right. This post actually made my day. You cann’t consider simply how so much time I had spent for this information!
Thank you!|
Fabulous, what a weblog it is! This website provides helpful
information to us, keep it up.|
Hi there, this weekend is good in support of me, since this time i am
reading this impressive informative post here at my house.
|
It’s awesome for me to have a site, which is helpful designed for my know-how. thanks admin|
It’s amazing to visit this site and reading the views of all friends about this piece of
writing, while I am also zealous of getting familiarity.|
Hello, I desire to subscribe for this weblog to obtain latest updates, thus where can i do it
please help out.|
Because the admin of this site is working, no question very rapidly it will be famous, due to its quality contents.
|
Hello, its nice piece of writing on the topic of media print, we all understand media is a enormous source of information.
|
Hi there colleagues, how is all, and what you would like to
say on the topic of this post, in my view its
really remarkable designed for me.|
Hi to all, because I am actually eager of reading this web site’s post to be updated daily. It consists of pleasant data.|
Hello to every one, it’s really a nice for me to pay a quick visit this web site,
it contains priceless Information.|
Hi to every one, the contents existing at this web site are genuinely remarkable for people knowledge,
well, keep up the good work fellows.|
Hi there friends, fastidious paragraph and pleasant arguments commented here, I am actually enjoying by these.
|
What’s up colleagues, its fantastic post regarding cultureand entirely explained, keep it up all the time.|
For latest information you have to pay a quick visit world-wide-web and on internet I found this web page as a most excellent web page for most recent updates.|
Hi there i am kavin, its my first occasion to commenting anyplace, when i read this paragraph i thought i could also make comment due to this brilliant post.|
What’s up everyone, it’s my first pay a visit at this site, and post is actually fruitful in favor of me, keep up posting these content.|
Hi it’s me, I am also visiting this web site on a regular basis, this web page is truly
pleasant and the visitors are actually sharing
fastidious thoughts.|
Hi there Dear, are you truly visiting this web
page daily, if so afterward you will without doubt get good experience.
|
What’s up every one, here every one is sharing these kinds of experience, so it’s fastidious to read this website, and I used to go to see this webpage every day.
|
I got this web page from my friend who informed me on the topic of this site and at the moment
this time I am visiting this website and reading very informative articles at this place.
|
Hi there, of course this post is actually nice and I have learned lot of
things from it about blogging. thanks.|
Hi, after reading this remarkable post i am too delighted to
share my knowledge here with mates.|
Hi to all, how is everything, I think every one is
getting more from this site, and your views are fastidious for new people.
|
What’s up, the whole thing is going perfectly here and ofcourse every one is sharing facts, that’s truly excellent, keep up writing.
|
Why viewers still use to read news papers when in this technological globe the whole thing is presented on net?
|
whoah this blog is wonderful i like reading your posts. Stay up the good work!
You know, a lot of people are looking around for this info, you
could help them greatly. |
Hi there, all the time i used to check blog posts here in the early hours in the morning, for the reason that
i love to find out more and more.|
What’s up to every body, it’s my first pay a visit of this webpage; this blog carries remarkable and truly excellent material in favor of readers.
|
This is really fascinating, You are an overly skilled blogger.
I have joined your rss feed and look ahead to seeking extra of your magnificent post.
Also, I have shared your site in my social networks|
This text is worth everyone’s attention. Where can I find out more?|
I’m gone to tell my little brother, that he should also pay a visit
this webpage on regular basis to take updated from
latest gossip.|
Pretty component of content. I simply stumbled upon your web site and
in accession capital to say that I get actually enjoyed account your blog posts.
Anyway I’ll be subscribing to your augment and even I fulfillment you get admission to persistently fast.|
I appreciate, result in I discovered just what I was having a look for. You’ve ended my four day
long hunt! God Bless you man. Have a great day.
Bye|
What a stuff of un-ambiguity and preserveness of valuable
know-how on the topic of unexpected emotions.
|
Remarkable things here. I am very satisfied to peer your article.
Thank you so much and I’m taking a look ahead to touch you. Will you kindly drop me a e-mail?|
Can you tell us more about this? I’d like to find out some additional information.
|
Thank you for another informative site. Where else could I get that kind
of information written in such a perfect method? I have a challenge that
I’m just now running on, and I’ve been on the glance out for such info.
|
Thanks , I’ve just been looking for info approximately this topic for a long time and yours is the best I’ve discovered so far.
But, what in regards to the conclusion? Are you sure in regards to the source?
|
Thanks for another great post. The place else could anybody get that
type of info in such an ideal way of writing? I’ve a presentation subsequent week, and I’m
on the look for such information.|
Valuable information. Lucky me I discovered your site unintentionally, and I’m stunned why this coincidence did not came about earlier! I bookmarked it.|
Just wish to say your article is as amazing. The clarity in your post is just great and that i can think you are knowledgeable on this subject. Fine along with your permission allow me to grab your RSS feed to stay up to date with drawing close post. Thanks a million and please continue the gratifying work.|
Thank you for the good writeup. It if truth be told used to be a leisure account it. Look complicated to far brought agreeable from you! However, how could we keep up a correspondence?|
Thanks a bunch for sharing this with all of us you actually know what you are talking about! Bookmarked. Please also seek advice from my website =). We can have a hyperlink alternate arrangement between us|
Good day very cool web site!! Guy .. Beautiful .. Superb .. I’ll bookmark your website and take the feeds additionally?
I’m satisfied to search out so many useful information here in the submit, we need work out more techniques on this regard, thank you for sharing. . . . . .|
Keep on writing, great job!|
Hello there, You have performed a great job. I’ll definitely
digg it and personally suggest to my friends. I’m confident they will be benefited from this site.|
This is my first time pay a visit at here and i am in fact impressed to read all at one place.|
you’re truly a excellent webmaster. The web site loading speed is amazing.
It sort of feels that you’re doing any unique trick. In addition, The contents are masterpiece. you have done a excellent process in this topic!|
Wow, incredible weblog structure! How lengthy have you ever been running a blog for? you made blogging glance easy. The full glance of your web site is magnificent, as well as the content!|
Thanks for the marvelous posting! I seriously enjoyed reading it, you’re
a great author. I will ensure that I bookmark your blog and will eventually come back in
the future. I want to encourage one to continue your great writing,
have a nice afternoon!|
My spouse and I absolutely love your blog and find nearly all of your post’s to be what precisely I’m
looking for. Do you offer guest writers to write content
for you personally? I wouldn’t mind producing a post or elaborating on a number of the subjects you write with regards to here. Again, awesome blog!|
We stumbled over here by a different page and thought I should check things out. I like what I see so now i am following you. Look forward to looking into your web page again.|
I like what you guys tend to be up too. This kind of clever work and exposure! Keep up the superb works guys I’ve incorporated
you guys to our blogroll.|
Greetings I am so glad I found your weblog, I really found you by error, while I was looking
on Aol for something else, Regardless I am here now and would
just like to say kudos for a remarkable post and a all round exciting blog (I
also love the theme/design), I don’t have time to go through it all at the moment but I have book-marked it and also added your RSS feeds, so when I have time I will be back to read much more, Please do keep up the fantastic work.|
Admiring the persistence you put into your blog and detailed information you provide. It’s awesome to come across a blog every once in a while that isn’t the same old rehashed material. Wonderful read! I’ve bookmarked your site and I’m including your RSS feeds to my Google account.|
Hello! I’ve been following your website for some time now and
finally got the courage to go ahead and give you a shout out from Humble Texas!
Just wanted to mention keep up the good work!|
Hmm it seems like your website ate my first comment (it was extremely long)
so I guess I’ll just sum it up what I submitted and say, I’m thoroughly enjoying your blog.
I as well am an aspiring blog writer but I’m still new to everything. Do you have any helpful hints for beginner blog writers? I’d genuinely appreciate it.
|
Woah! I’m really digging the template/theme of this website. It’s simple, yet effective.
A lot of times it’s very difficult to get that “perfect balance” between superb usability and visual appearance. I must say that you’ve done a
great job with this. Additionally, the blog loads
super quick for me on Firefox. Exceptional Blog!|
Do you mind if I quote a few of your articles as long as I provide credit and sources back to your site?
My website is in the very same niche as yours and my visitors would genuinely benefit
from a lot of the information you present here. Please let me know if this
alright with you. Thanks a lot!|
Superb blog you have here but I was wanting to know if you knew of any
discussion boards that cover the same topics discussed here?
I’d really love to be a part of group where I can get feed-back from other knowledgeable people that share the same interest. If you have any suggestions, please let me know. Thanks!|
Hi there! This is my first comment here so I just wanted to give a quick shout out and say I truly enjoy reading through your blog posts. Can you suggest any other blogs/websites/forums that go over the same subjects? Appreciate it!|
Please let me know if you’re looking for a author for
your weblog. You have some really good posts and I feel I would be a
good asset. If you ever want to take some of the load off, I’d love to write some content for your blog in exchange for a link back to mine. Please shoot me an e-mail if interested. Regards!|
Have you ever considered about adding a little bit more than just your articles? I mean, what you say is fundamental and everything. Nevertheless just imagine if you added some great visuals or videos to give your posts more, “pop”! Your content is excellent but with images and clips, this blog could certainly be one of the most beneficial in its niche. Fantastic blog!|
Great blog! Is your theme custom made or did you download it from somewhere? A design like yours with a few simple tweeks would really make my blog shine. Please let me know where you got your design. Kudos|
Howdy! Someone in my Facebook group shared this site with us so I came to check it out. I’m
definitely enjoying the information. I’m bookmarking and will be tweeting this to my followers! Fantastic blog and wonderful style and design.|
Wonderful blog! Do you have any recommendations for aspiring writers? I’m hoping to
start my own site soon but I’m a little lost on everything. Would you suggest starting with a free platform like WordPress or go for a paid option? There are so many choices out there that I’m totally confused .
. Any suggestions? Appreciate it!|
An impressive share! I’ve just forwarded this onto a co-worker who has been doing a little homework on this. And he actually bought me lunch simply because I found it for him… lol. So allow me to reword this…. Thanks for the meal!! But yeah, thanks for spending the time to discuss this matter here on your web page.|
A motivating discussion is worth comment. I think that you need to write more on this issue, it might not be a taboo matter but generally people do not talk about these issues. To the next! Best wishes!!|
Can I simply just say what a comfort to find somebody that really knows what they’re discussing on the internet.
You actually realize how to bring an issue to light and make it important.
More and more people should look at this and understand this side of
the story. I can’t believe you aren’t more popular because you most
certainly possess the gift.|
Great info. Lucky me I recently found your blog by chance (stumbleupon).
I’ve book marked it for later!|
Very good article. I will be experiencing a few of these issues as well..|
Excellent site you have here.. It’s hard to find high-quality
writing like yours these days. I honestly appreciate individuals like you!
Take care!!|
Wonderful article! We are linking to this great post on our site.
Keep up the great writing.|
Hi! I simply would like to give you a big thumbs up for the great information you’ve got here on this post. I will be returning to your website for more soon.|
Hello there! I could have sworn I’ve visited your blog before but after browsing through many of the posts I
realized it’s new to me. Regardless, I’m certainly delighted I stumbled upon
it and I’ll be book-marking it and checking back frequently!|
Howdy! This post couldn’t be written much better! Going through this
article reminds me of my previous roommate!
He always kept preaching about this. I’ll forward this article to him. Pretty sure he’ll have a great read.
Thanks for sharing!|
Hi, I think your blog may be having web browser compatibility problems.
Whenever I take a look at your website in Safari, it looks fine however, when
opening in I.E., it has some overlapping issues. I merely wanted to give
you a quick heads up! Other than that, wonderful website!
|
I like looking through an article that will make people think.
Also, thanks for allowing for me to comment!|
Everyone loves it when individuals get together and share opinions.
Great blog, continue the good work!|
I really love your website.. Pleasant colors & theme.
Did you create this website yourself? Please reply back as
I’m attempting to create my own blog and would love to know where you got this from or just what the theme is called. Thank you!|
I needed to thank you for this excellent read!! I definitely loved every bit of it. I’ve got you book marked to look at new stuff you post…|
I used to be able to find good info from your blog articles.
|
I was pretty pleased to uncover this page. I need to to
thank you for ones time for this particularly wonderful read!
! I definitely enjoyed every bit of it and I have you bookmarked
to see new stuff in your blog.|
I would like to thank you for the efforts you have
put in penning this site. I’m hoping to see the same high-grade content by you later on as well. In fact, your creative writing abilities has inspired me to get my own, personal blog now ;)|
Good post. I learn something totally new and challenging on blogs I stumbleupon on a daily basis. It’s always useful to read through articles from other authors and practice something from
their websites. |
bookmarked!!, I love your website!|
Next time I read a blog, Hopefully it does not fail me just as much as this particular one.
I mean, Yes, it was my choice to read through, nonetheless
I actually believed you’d have something interesting to talk about. All I hear is a bunch of crying about something that you could possibly fix if you weren’t too busy looking for
attention.|
There is definately a lot to learn about this topic.
I love all the points you’ve made.|
This blog was… how do I say it? Relevant!! Finally I’ve found something
that helped me. Thanks!|
That is a very good tip especially to those fresh to the blogosphere.
Simple but very accurate information… Many thanks for sharing this one.
A must read article!\
I have a suggestion for fixing Social Security instead of doing away with it. Why have a ceiling on tax payments. Since we are supposed to run out of money, why not lift the ceiling completely and save social security by putting more money into it for all generations. It doesn’t seem right to cut payments to partcipates when we can save it for future generations. Pay for it by no ceilings. Those making more money are not going to miss it, and a lot of people didn’t even know there was a ceiling. They will now by this article but they will not miss it if they ever reach a so called ceiling and they will know by paying more in we all will get it.
I am a 59 year old man that is disabled by blindness and arthritis in my spine, and most of my body. What I want to know if people like myself getting a tax break this year and if so how much and when can we expect it.
Yours Gratefully,
Anthony G. Alvarez
Hello, is there anyone know that how I get the refund for the overpayment for the social security tax (6.2% as employer and 6.2% as employee) from the self-employed income.
My CPA said that I could only get refund for the social security tax (6.2%) as employee when I fill in 1040 form.
There is no tax form for employer to claim the overpayment for the social security tax and medical tax, is that right?
Thank you very much!
Sherry
The reason that people refer to it as being paid on your behalf is that, if you are self-employed, you would have to pay the full amount (employee + employer shares) all by your lonesome. So yes, the employer is picking up an amount that would otherwise be paid by you if you were self-employed.
“The employer pays…on your behalf” — sure, it’s considered a ‘normal’ part of having employees, but this is a part of the money that’s theoretically “available” to the retiree individually. Of course, I have a hard time believing any of this money, the withheld or the ‘match’ will be around when I’m ready to retire.
I expect the ceiling to go up, the age for “retirement” to go up, and the benefit to go down. So I’d say the money isn’t available to the employer, and isn’t available to be salary either.
“your employer pays an equal amount on your behalf”
I know this is the common phraseology, but it’s a complete fabrication/myth that the employer pays anything on behalf of the worker. It’s a cost of employment just like salary and if it weren’t being paid to the government, it would be available to be paid as salary.
Nothing infuriates me more than these type of shenanigans with accounting and semantics designed to fool the average citizen. And everyone goes along with it…Arrrgggh!!!
If you’re self-employed, you can sometimes avoid some of the SE tax by incorporating as an “S” Corp. There are costs to incorporating, so you usually want to be making at least $30k (depending on the state) as a sole-prop or partnership or llc member.
If only it weren’t going to be eliminated in a few years when the trust fund fraud is exposed…
Hot diggity dawg this is good news!
New goal!
You’re my hero. 😉