Social Security Payroll Tax Limits for 2009, 2010
Social Securitys Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year.
The Social Security Wage Base (SSWB) is the maximum earned gross income on which a wage earners Social Security tax may be imposed. The Social Security tax is one part of the Federal Insurance Contributions Act tax (FICA) and Self-employment tax, the other part being the Medicare tax.
Average Earnings
When average earnings are calculated to determine a workers Social Security benefit, the maximum amount of covered wages are taken into account. The Social Security wage base for 2010 will remain the same as 2009 which is $106,800.
The Social Security tax rate paid by the employer is 6.20% and the employee will also pay 6.20%. The maximum Social Security tax that employees and employers will each pay in 2010 is $6,621.60.Now if youre self-employed you will pay the entire amount of applicable tax.
Social Security Payroll Tax Limits for 2010
The FICA tax can sometimes be referred to as the payroll tax or the self-employment tax depending on your employment status. This is your contribution to Social Security and Medicare as a percentage of your salary. As you know, we all have to pay in while we are working in order to collect when we are older. Hopefully the money will still be there for us.
Calculating Payroll Tax Limits
If you would like to estimate your taxes owed you can use the free tax calculator at Turbo Tax Online. They have several different tax preparation software programs available.
If the percentages and limits have your mind swirling, the software can help you figure it all out. It doesnt matter whether youre an employee or self-employed. They have software packages for the self-employed and the employee.
As a matter of fact, when you start to use the software and enter information, you will be advised to switch to a different tax software choice if they determine another package would be to your benefit. So dont worry about whether or not you chose the best tax software package.
Online Tax Preparation Software
If you would like to estimate your Social Security payroll tax you should try TurboTax Online. There are many benefits waiting for you to take advantage of. You are guaranteed the biggest refund possible or least tax owed.
You will know right where you stand. As you enter data they will display your refund (or tax owed) on every screen and it will update the amount as you answer questions.
Visit TurboTax Online today to discover all of the benefits available to you! Learn More about Federal Payroll Withholding.
