Social Security maximum taxable earnings : Thousands of people are searching for information about their tax returns.
The United States of America is in tax season, and millions of people are trying to learn as much as they can about their own returns, and how to legally pay as little tax as possible, or just make sure they don’t overpay.
A given year’s earnings are limited by Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program. Additionally, these earnings are subject to a limit when they are used to calculate benefits.
Each year, the limit is adjusted to reflect the changes in the national average wage index. Contribution and benefit bases, or taxable maximums, are commonly referred to as contributions and benefits.
The maximum amount of taxable income for 2023
Currently, 160,200 dollars is the maximum amount taxable in 2023. According to statute, each employee and employer will be taxed 6.2 percent on wages in 2023.
Accordingly, in 2023, an individual with a wage of 160,200 dollars or more would pay 9,932.40 dollars into the OASDI program, as would their employer. It is estimated that the OASDI tax rate for self-employment income will be 12.4% in 2023.
Accordingly, the Medicare Hospital Insurance program’s taxable maximum was set at the same level as the OASDI program between 1966 and 1990. There were three separate taxable maximums for Hospital Insurance between 1991 and 1993: 125,000, 130,200, and 135,000.
Since 1993, HI-taxable earnings have not been limited and the rates are 1.45 percent for employers and employees. A self-employed individual pays 2.9 percent.
Social Security maximum taxable earnings be in 2021
As of my knowledge cutoff in September 2021, the Social Security maximum taxable earnings for that year was $142,800. This means that individuals earning up to $142,800 in wages or self-employment income were subject to the Social Security payroll tax, which is currently 12.4% (6.2% paid by the employee and 6.2% paid by the employer) on income up to that amount. Any income above the maximum taxable earnings limit is not subject to the Social Security tax. The maximum taxable earnings amount is adjusted annually to account for inflation.
