“Social Security Wage Base Increasing in 2023”

– The wage base for computing Social Security tax will increase to $160,200 for 2023.
– The FICA tax rate for employers remains 7.65% for 2023.
– An employee will pay 6.2% Social Security tax on the first $160,200 of wages, plus 1.45% Medicare tax on the first $200,000 of wages, and 2.35% Medicare tax on all wages in excess of $200,000.
– The self-employment tax for 2023 is 12.4% Social Security tax on the first $160,200 of self-employment income, plus 2.9% Medicare tax on the first $200,000 of self-employment income, and 3.8% on all self-employment income in excess of $200,000. – Social Security tax wage base for 2023 is $160,200, up from $147,000 in 2022.
– There is no maximum amount for Medicare tax.
– FICA tax rate for employers in 2023 is 7.65% – 6.2% for Social Security and 1.45% for Medicare.
– Employees will pay 6.2% Social Security tax on the first $160,200 of wages, 1.45% Medicare tax on the first $200,000 of wages, and 2.35% Medicare tax on all wages in excess of $200,000. – In 2023, self-employed people are subject to a 12.4% Social Security tax on the first $160,200 of income, with a maximum tax of $19,864.80, as well as a 2.9% Medicare tax on the first $200,000 of income.
– Self-employed individuals must also pay an additional 3.8% Medicare tax on all income in excess of $200,000.
– Employees with more than one employer cannot ask any employer to stop withholding Social Security taxes once they reach the wage base threshold. Each employer must withhold Social Security taxes from the individual’s wages.
– Any excess Social Security tax withheld will be credited on the employee’s tax return.
– Businesses can contact KSDT CPA for assistance with 2023 payroll tax filing and compliance to ensure they stay in compliance. – Operating as a Qualified Small Business Corporation (QSBC) can provide tax benefits for small businesses.
– Engaging in M&A requires thorough due diligence to ensure the success of the transaction.
– Avoiding probate can simplify estate planning and reduce delays in transferring assets.
– Employers with tipped employees may qualify for a tax credit related to tip income.

Employers: In 2023, the Social Security wage base is going up