Here’s some good news to share with your higher-ups that’ll likely upset retirees.
The Social Security Administration just announced there’ll be no change in the 2011 taxable wage base – it’ll remain $106,800 for the second year in a row. That’s because the Consumer Price Index (CPI) didn’t rise in the third quarter of 2010, compared with the same time frame in 2009.
- Payroll won’t have to deduct more Social Security taxes from higher-ups’ paychecks than they did last year. The maximum tax paid will be $6,621.60 per person. Employers must contribute an equal amount. The Medicare portion of the Federal Insurance Contributions Act tax, 1.45%, has no ceiling, as always, and remains unchanged.
- Monthly Social Security and Supplemental Security Income (SSI) benefits won’t increase for retirees, either. Should they call, let them know that in 2011 (also unchanged from 2010), those under full retirement age can earn $14,160 per year ($1,180 per month) without affecting their Social Security benefits. However, one dollar in benefits will be withheld for every $2 in earnings above the limit. The threshold is different the year the employee reaches retirement age, when the person may still be working. Then, they can earn up to $37,680 per year ($3,140 per month) without affecting benefits. SSA will withhold one dollar in benefits for every $3 in earnings above the limit. There is no limit on earnings beginning the month an individual attains full retirement age. For more info, click here.
Other important 2011 notes:
- The taxable wage base for self-employed individuals in 2011 is also $106,800. There’s no limit on the Medicare tax. The self-employment tax rate remains 15.3% (i.e., the Social Security tax rate of 12.4% plus the Medicare tax rate of 2.9%). The maximum tax for a self-employed individual will be $13,243.20 in 2011.
- The threshold for domestic employees will be $1,700 in 2011.
- The coverage threshold for election workers in 2011 will be $1,500.
You can get more information here.