Retirement

The most frequently asked tax questions related to Retirement
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Social Security

2018- Social Security

Asked Monday, December 24, 2018 by an anonymous user
For 2018, the tax rate on the employee portion of Social Security is 6.2% on wages up to $128,400, so Social Security tax withholdings should not exceed $7,960.80. Medicare tax of 1.45% is withheld from all wages regardless of amount.

On Schedule SE for 2018, self-employment tax of 15.3% applies to earnings of up to $128,400 after the earnings are reduced by 7.65%. The 15.3% rate equals 12.4% for Social Security (6.2% employee share and 6.2% employer share) plus 2.9% for Medicare.

If net earnings exceed $128,400, the 2.9% Medicare rate applies to the entire amount. One half of the self-employment tax may be claimed as an above-the-line deduction on Schedule 1 of Form 1040.
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Social Security

Earnings limit for T/P's under full retirement age

Asked Monday, October 31, 2016 by an anonymous user
Recipients under the full retirement age can earn up to $15,720 between the ages of 62 and 65. people who turn 66 in 2016 will not loose any benefits if they earn $41,880 or less before they reach that age.
Recipients under the full retirement age can earn up to $16,920 between the ages of 62 and 65. people who turn 66 in 2017 will not loose any benefits if they earn $44,880 or less before they reach that age.
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Social Security

Social Security wage base

Asked Monday, October 31, 2016 by an anonymous user
In 2016, there is no increase in the Social Security wage base of $118,500. The Social Security tax rate on employers and employees stays at 6.2%. The Medicare tax rate on employers and employees stays at 1.45% on all pay. BUT...
In 2017, the Social Security wage base is raised to $127,200. The maximum amount of Social Security tax a taxpayer will pay in 2017 will increase from $7,347 in 2016 to $7,886.40 in 2017. An increase of $539.40.
in 2017, the Social Security tax rate on employers and employees stays at 6.2%. The Medicare tax rate on employers and employees stays at 1.45% on all pay.
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Retirement Planning

Deadline to set up Retirement Plan

Asked Thursday, February 28, 2013 by an anonymous user
IRA (Traditional or Roth) Deadline to establish the plan and the Deadline to fund the plan is April 15th of the following year.
SEP IRA - Deadline to establish the plan is the due date of the tax return, including extensions and the Deadline to fund the plan is due date of the tax return, including extensions.
Simple IRA - Deadline to establish the plan is October 1st of that year and the Deadline to fund the plan for the Employee contributions must be withheld from pay by December 31st and remitted to the investment firm as soon as reasonably possible and the Employer contribution must be made by the tax return due date, including extensions.
401-K or 403(b)- Deadline to establish the plan is October 1st of that year for safe harbor plans, otherwise December 31st of that year. Deadline to fund the plan for the Employee contributions must be withheld from pay by December 31st and remitted to the investment firm as soon as reasonably possible and the Employer contribution must be made by the tax return due date, including extensions.
Defined Benefit Plans and Profit Sharing Plans and Keough Plans must be set up by Dec 31st of that tax year.
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Social Security

Social Security - Mailing of Paper checks to end

Asked Thursday, January 31, 2013 by an anonymous user
On March 1, 2013, the Treasury department will stop mailing paper checks to Social Security recipients. Retirees will be required to choose to have their Social Security payments either directly deposited into a bank or credit union account or loaded onto a prepaid Direct Express Debit MasterCard.
New Social Security beneficiaries have been required to choose an electronic payment option since May 2011, and approximately 93 % of Social Security and Supplemental Security Income payments are already being made electronically.
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Social Security

Social Security - 2013 Cost of Living Adjustment

Asked Tuesday, January 15, 2013 by an anonymous user
The Social Security Administration, who made the wage base 2013 announcement (The wage base in 2013 is $113,700) also announced that people receiving social security benefits will get a cost of living adjustment (or COLA) adjustment in 2013. Social security benefits will go up 1.7% in 2013. They increased 3.6% in 2012.
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Social Security

Social Security - 2013 Rate

Asked Tuesday, January 15, 2013 by an anonymous user
The 2012 social security tax rate is 6.2% of your earnings (or 12.4% for self employed tax),The employer will still need to pay 6.2%
The 2011 Payroll Tax Cut temporarily lowered the social security tax rate for the employee to 4.2% in 2011.The employer will still need to pay 6.2%
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Social Security

Social Security - Eligibility

Asked Tuesday, January 15, 2013 by an anonymous user
Everyone born in 1929 or later needs 40 Social Security credits to be eligible for retirement benefits. You can earn up to four credits per year, so you will need to work at least 10 years to become eligible for retirement benefits.
Each year the amount of earnings needed for a credit rises as average earnings levels rise. In 2012, you receive one credit for each $1,130 of earnings, up to the maximum of four credits per year.
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Social Security

Social Security - Eligibility

Asked Tuesday, January 15, 2013 by an anonymous user
Everyone born in 1929 or later needs 40 Social Security credits to be eligible for retirement benefits. You can earn up to four credits per year, so you will need to work at least 10 years to become eligible for retirement benefits.
Each year the amount of earnings needed for a credit rises as average earnings levels rise. In 2012, you receive one credit for each $1,130 of earnings, up to the maximum of four credits per year.
If you become disabled before age 62, the number of credits needed for entitlement to disability benefits depends on your age at the time you become disabled.
If you die before age 62, the number of credits needed for survivors to receive benefits on your record depends on your age at the time you die.
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