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2018 FICA wage base, withholding allowances, retirement contributions

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in Office Management,Payroll Management

The Social Security Administration has announced that the taxable wage base for the Social Security portion of FICA will increase to $128,700 in 2018. That’s a 1.179% hike over the 2017 wage base of $127,200.

The IRS has announced that the amount employees can contribute to their 401(k) and 403(b) plan accounts will increase by $500, to $18,500 for 2018, Employees 50 and older will be able to contribute $6,000 in pretax catch-up contributions, the same as in 2016 and 2017.

2018 Social Security wage base

The 6.2% Social Security tax is payable by both employers and employees; in 2018, the maximum tax is $7,979.40. Except for pretax medical and tax-free fringe benefits, all wages are subject to the 1.45% Medicare portion of FICA, or the 2.35% Medicare portion of FICA for employees earning more than $200,000, since there’s no wage base. (SSA Fact Sheet, 10-13-17)

Exempt amounts for retirees. Retirees who want to return to work ...(register to read more)

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