head1

Accurate Accounting.  It's Not Optional... It's ESSENTIAL!

Return to Blog

2014 Social Security Baselines

On Wednesday, October 30, 2013, the Social Security Administration (SSA) announced its “baselines” for 2014.  In this post, I will cover some of the items that might be of interest to most.

The tax rates for the SSA remain the same: Social Security Old Age, Survivors, and Disability Insurance (OSADI), 6.20% and Medicare Health Insurance (HI) 1.45% (total 7.65%), with employers paying their 7.65% for each employee as well. Self-employed folks pay 15.30%, but there is some tax maneuvering at year end for the self-employed.  Important to note, AS OF 01/01/2013, individuals with earned income of more than $200,000 ($250,000, Married filing jointly), will be paying an additional 0.9% in Medicare Taxes!

The MaximumTaxable Earnings for Social Security OSADI has increased from $113,700 in 2013 to $117,000 in 2014, an increase of $3,300 or 2.9%.

Tax Exempt Earnings while receiving Social Security OSADI have also changed:

For those before Full Retirement Age (65, born before 1937; 67, born after 1937): $15,120/yr., 2013; $15,480/yr., 2014, an increase of $360 or 2.4%.

($1.00 in benefits will be withheld for every $2.00 earned above the limit)

For those after Full Retirement Age (65, born before 1937; 67, born after 1937): $40,080/yr.; $41,400/yr., 2014, an increase of $1,320 or 3.3%.

($1.00 in benefits will be withheld for every $3.00 earned above the limit)

The earnings limitations shift the month you reach Full Retirement Age.

Just as a note, the 0.9% increase in the Medicare Tax for high earners, if you can consider $200,000/$250,000 a high earner, is simply a tid-bit of our current government’s methods of raising tax rates, as opposed to raising the base that pay taxes.  Personally, I am a believer in expanding the tax base rather than raising the tax rates; increase job growth, get more folks back to work and put work/training requirements on low/no income folks to get them off of the “entitlement life” roles and on to the “fulfilling life” roles.