Social Security Administration announces 2015 wage base
On Wednesday, the Social Security Administration (SSA) announced that the wage base above which taxes for old age, survivors, and disability insurance (OASDI) are not due will increase from $117,000 to $118,500 in 2015. The new rate means employees will pay a maximum of $7,347 of OASDI in 2015, with employers paying an equal amount. According to the SSA, 10 million of the estimated 168 million workers who will pay OASDI tax in 2015 will exceed the higher wage base.
The SSA reminded taxpayers that the Medicare hospital insurance (HI) portion of the tax, which is also paid by employers and employees, has no wage limit. It applies to all wages at a rate of 1.45%—unchanged from 2014. The additional Medicare tax of 0.9% also applies to wages in excess of $200,000 for single taxpayers and $250,000 for married taxpayers filing jointly, but there is no employer portion for this tax, although employers must withhold the employee portion.
The SSA also announced a 1.7% cost-of-living increase for Social Security benefits that will take effect in 2015. (Journal of Accountancy)