What is the social security tax limit?

The American Social Security program is a pension program designed as insurance for pensioners and disabled people. It allows those who have paid the system when they worked - or survivors of these people - gathered monthly benefits as soon as they retire or become disabilities and cannot work. Like the monthly benefits, they have a set limit for those who are entitled to payments, there is also an annual social security tax limit. This limit is based on salary and determines how much it can pay to the system every year. If a person reaches this limit for a given year, social security taxes are no longer collected from his payment until the new tax year begins. The Social Security Limit uses the average wage index to calculate how the government sets wage restrictions. In 2009, the social security tax limit was set for an annual revenue of $ 106,800 with a tax rate of 6.2 percent applied by the employer and employee. Any inThe people of this ceiling would not be subject to tax.

The social security tax rate continued in 2010 for employers and employees at 6.2 percent. The 2011 Social Security Limit with annual earnings held at $ 106,800, but a tax holiday that received the US Congress in 2010 in 2010. This means that the employee would be responsible for up to $ 4,485.60 in 2011.

The tax limit also applies to self -employed people who are obliged to pay employer and employees' contributions. This was left by self -employed persons responsible for 12.4 percent in 2009 and 2010. When the 20100 -year tax relief Act of Social Security Care at 4.2 percent for part of the employees, which was 10.4 P in 2011a rock for a self -employed person.

In 1937, the social security tax limit was set at $ 3,000 of income and the combined rate was 2 percent of this amount, ie 60 USD. Since these first days, there have been many changes in the original law. In 1965, the US Congress passed the Medicare Hospital Law and this tax began to be collected next year, subject to the same limit limits as the taxation of social security. From 1991 to 1993, separate income limits were introduced, after which the threshold of earnings for Medicare was completely canceled. In 1975, the cost of living costs began in force due to the US Congress in 1972 and both social security tax and tax rate began to increase approximately 12 years after the program became active.