The Social Security Administration (SSA) announced that the wage and self-employment income base for the Social Security tax will rise next year. The size of the increase caught many tax experts off-guard: It reflects the largest hike—in both actual dollars and percentage—since 2002. For 2006, a person's first $94,200 in wages or self-employment income will be subject to the Social Security tax (up from $90,000 for 2005). As in previous years, all wages and self-employment income are subject to the Medicare portion of the tax. For employees, the Social Security tax rate is 6.2 percent and the Medicare tax rate is 1.45 percent. (Employers pay the same rates on.) Self-employed people pay a 12.4 percent Social Security tax on the first $94,200 of self-employment income, plus a 2.9 percent Medicare tax on all income, without limit.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/5561/brace-for-social-security-tax-increase-in-06 "