When: Who it Affects: |
Social Security contribution limit goes up Every year, the Internal Revenue Service makes an inflation adjustment for contributions workers must make to the Social Security system. For taxpayers who work for an employer: For 2003, the rate is 6.2% of your first $87,000 in wages or salary, up from $84,900 in 2002. Once you reached $87,000, you should not have paid any more into the system for the rest of the year. Your employer must match the tax. In 2004, the income limit rises to $87,900. For self-employed people: The Social Security rate is 12.4% . Don't forget the Medicare tax You also pay 1.45% of all your wages or salary in Medicare tax -- 2.9% if you are self-employed. There is no limit on the income subject to the tax. Payroll taxes total 15.3% of wages or self-employment income. |
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