Tag Archive for: Social Security Wage Base

30th Annual Tax Letter

Congress passed the American Taxpayer Relief Act of 2012 on January 2nd, averting the fiscal cliff. But, what did that Act do? Download our 30th Annual Tax Letter to find out!


In This Issue:


  • Tax Rates — For most Americans, tax rates will stay the same for 2013, as they were in 2012.
  • Alternative Minimum Tax — Gone are the days of waiting for Congress to enact its annual AMT patch.
  • Education Provisions — To help offset the ever-increasing cost of education, Congress has extended several popular education provisions (although not permanently).
  • 2% Employee Social Security Break – This provision was allowed to sunset.
  • Estate Taxes — Your children have been dying to learn about this provision!
  • Capital Gains and Qualified Dividends – Learn how you will be affected.
  • Phase-Outs – Learn what will happen with personal exemptions and itemized deduction phase-outs.
  • Depreciation — Congress didn’t fail to deliver on a belated Christmas present to businesses having purchased or planning to purchase fixed assets!
  • Tax-Free Sale of Business Stock — This is a provision that has been modified and extended many times over the years and is often overlooked as a long-term planning strategy.
  • Important Facts & Figures – Including the standard business mileage rate, Social Security wage base, and earnings limits for Social Security recipients.
  • 2013 Contribution Limits – How will your plans be affected?


Next Month’s Issue – The Affordable Care Act

Many changes begin for both individuals and businesses in 2013 as a result of the Affordable Care Act. Accordingly, we are devoting next month’s newsletter to these provisions, as well as, a special section on our website. Look for this the first of February.

Social Security Wage Base to Increase in 2013


Employers who handle payroll in-house will need to be sure to adjust their employees’ paychecks accordingly.

On October 16th, the Social Security Administration announced that the taxable wage base would increase from $110,100 to $113,700. This means that employees will pay the following on taxable income:

  •  6.2% social security tax on taxable income up to $113,700:
  •  1.45% Medicare tax (aka Hospital Insurance) for the first $200,000 of taxable income
  • 2.35% Medicare tax on taxable income over $200,000

Employers who handle payroll in-house will need to be sure to adjust their employees’ paychecks accordingly.

Questions? Contact Melissa Miller, payroll specialist.

Melissa Miller
Payroll Specialist