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Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
In the annual report by the Social Security Administration Chief Actuary is an estimate of the top Wage Base for 2014 through 2022. For 2013, the Wage Base is $113,700. The 6.2% FICA tax applies on all earnings up to this amount. Once you reach the threshold amount, the remaining earnings are subject to the Medicare tax of 2.9% or 3.8% for high income earners.
The projected wage base for 2014 is expected to rise about 1.6% to $115,500. Based on their assumptions, the wage base will start to increase at a more dramatic rate starting in 2015 and by 2022, the wage base will be $165,600. That is almost a 50% increase from the current 2013 amount.
Also, as Congress debates changes to Social Security, it would not surprise us that the Wage Base may be expanded even more to shore it up.
We will keep you posted.
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