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Be Prepared for a Higher Social Security Wage Base in 2017

11/30/2016

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For 2017, the wage base for withholding social security tax from wages has increased to $127,200, up from $118,500 in 2016.

The “wage base” is the amount of wages on which employers and employees must pay the 6.2% social security tax. The increased wage base means an additional $8,700 of your income is taxed.

The wage base does not affect the 1.45% Medicare payroll tax. Medicare tax is assessed on all wages and net income from self-employment, including amounts above the base.

The 0.9% Additional Medicare Tax is not affected either. That tax applies to your compensation in excess of $250,000 when you’re married filing jointly ($200,000 when you’re single).

The federal payroll tax rate for employers and employees remains 7.65%, with social security tax withheld and paid at 6.2%, and Medicare tax withheld and paid at 1.45%.

This is general information and should not be acted upon without first determining its application to your specific situation. Please contact your CPA or tax advisor for additional details.

December Tax Reminders

11/28/2016

A few reminders for December:

December 15 – Due date for calendar-year corporations to pay the last installment of 2016 estimated income tax.
December 31 – Deadline to complete 2016 tax-free gifts of up to $14,000 per recipient.
December 31 – Deadline for paying expenses you want to be able to deduct on your 2016 income tax return.

The information presented is of a general nature and should not be acted upon without further details and/or professional guidance. For assistance in identifying and utilizing all the tax deductions to which you are entitled, please contact your CPA or tax preparer.

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Successfully meeting the challenges inherent to new and smaller businesses provides me with a special type of satisfaction.

Supporting businesses that have the potential to become amazing – from both the perspective of owners and team members as well as their clients – is what I enjoy.

I hope to use this blog to provide information specific to businesses that are growing from small beginnings into exceptional companies.

Be Prepared for a Higher Social Security Wage Base in 2017

December Tax Reminders

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