Social Security Component of FICA to Increase
Margaret Amsden
The Social Security Administration announced the maximum earnings subject to the Social Security component of the FICA tax will increase for 2017 by $8,700. For 2017 the maximum Social Security tax paid by employers and employees will be $7,886.40 each, correlating to the formula of $127,2000 x 6.2%.
- A self-employed person with at least $127,200 in net self-employment earnings will pay $15,772.80, or the sum of $127,200 x 12.4% for the Social Security part of the tax
- The Medicare component remains 1.45% of all earnings. Individuals with earned income of more than $200,000, or $250,000 for married couples filing jointly) will pay an additional .9% in Medicare taxes.
Other 2017 cost-of-living adjustments can be found on the Social Security Administration website.