What is social security tax?

Social security tax is a deduction of wages launched by the government of the United States in the 1930s. This tax is paid by most workers and their employers and also includes self -employed persons. The money collected through social security is used to help American citizens who are no longer able to work because of disability, death or retirement age. This is also aimed at the system known as Medicare, which offers health benefits to qualifying individuals. The tax rate may change from year per year depending on the need for recipients and the tax is deducted by the employer of the employee's payout in each pay period.

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When individuals are employed, both employees and employers pay taxes, each party paying half of the tax, while self -employed citizens are obliged to pay the entire amount. The actual amount of the rate is determined by the current government law regarding SOCial security and rate may be the Change depending on how much money aid is needed to continue the financing of the Social Security program. When the tax was originally created, the rate was 2%; This amount increased over time and in the 90s the rate was increased to 6.2%. This rate remained stable until 2011, when it was reduced to 4.2%.

It is possible that an employee can have too much money deducted from a paycheck towards social security. In this situation, the employee may submit a compensation through his tax return. However, if the employer pays too much for the fund, no refund can be provided, so it is important that employers pay the right amount in advance.

Use and recipients

The purpose of the social security tax is to ensure that every American citizen has some type of income, even if he becomes disabled or too old to do,To work and fund the Medicare system. All the money collected by means of social security tax is included in the fund where they adequately distribute. The recipient will receive their share of cash assistance in the form of a check that can be automatically sent or deposited to a bank account.

This fund benefits several different groups of individuals. Qualification conditions usually include situations in which someone becomes disabled, in which case they receive monthly income from social security tax. If a parent with children under 18 dies, each child receives a monthly income known as the "benefits of survivors" until his 18th birthday. Pensioners also benefit from social security tax: after retirement age, the individual should receive a monthly income from social security tax.

Medicare

In 1965, this government tax was increased to pay for expansion known as Medicare. This new program has been established with the aim of providingAt the benefits of health care to American citizens who are 65 years or older or meet other requirements before this age. In order to be qualified for Medicare, the citizen must usually be 65 years or an older and legal citizen or a permanent population; However, it is possible to qualify before 65 years. People with some disabilities, most of whom already receive social security, or those who have kidney disease in the final stage, can become Medicare recipients at a younger age.

Created from necessity

Before great depression, the working class in America found itself with several financial problems; At that time, if one was unable to work, he had no way to support himself or his family. This was true for older persons and for those who were sick or injured. Government health insurance for the elderly did not exist at that time, and without income, most individuals could not pay for medical care or daily life expenses for themselves or their family. If for some reason he had a worked scorHopen to save money on your own lifetime as soon as he was too old to work, his income would end. All this would change in 1935, when President Franklin D. Roosevelt signed the Social Security Tax Act to the law.