What is the Social Security tax rate for 2010?
The Social Security tax withheld from employees during the year 2010 will be 6.2% of the first $106,800 of each employee’s taxable earnings. The employee’s earnings in excess of $106,800 are not subject to the Social Security tax. In addition to the Social Security tax, the entire amount of each employees’ taxable earnings is subject to the Medicare tax of 1.45%.
Both the Social Security tax and the Medicare tax must be matched by the employer. This means the employer must remit to the federal government 12.4% of each employee’s first $106,800 of taxable earnings plus 2.9% of each employee’s earnings regardless of amount.
Self-employed individuals are responsible for paying both the employee and the employer portions of the Social Security tax and the Medicare tax.
Learn more about Payroll Accounting.
About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.
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I’ve had an employee who is 70 come and tell me I should not be taking out the Medicare portion of FICA on her income. She was alerted through TURBO TAX. According to my research, I have been unable to find any reference to age and deducting FICA taxes from employment compensation.
Any information out there?
Am I correct, that the Social Security tax receipts by the Federal Government become government income like any taxes and are used for government operations. The funds are “invested” in special government bonds. However, the government does NOT reinvest interest paid on the bonds each year–It does not compound interest (as any investor would). If it did so, Social Security funds would be far larger, and Social Seucrity would not run out of funds within the foreseeabvle future.
(I tried to get an asnwer to this question through the Internet, Social Security, etc., not
possible.