FICA Wage Base is Going Up (and Up and Up)!
In the annual report by the Social Security Administration Chief Actuary is an estimate of the top Wage Base for 2014 through 2022. For 2013, the Wage Base is $113,700. The 6.2% FICA tax applies on all earnings up to this amount. Once you reach the threshold amount, the remaining earnings are subject to the Medicare tax of 2.9% or 3.8% for high income earners.
The projected wage base for 2014 is expected to rise about 1.6% to $115,500. Based on their assumptions, the wage base will start to increase at a more dramatic rate starting in 2015 and by 2022, the wage base will be $165,600. That is almost a 50% increase from the current 2013 amount.
Also, as Congress debates changes to Social Security, it would not surprise us that the Wage Base may be expanded even more to shore it up.
We will keep you posted.
Paul Neiffer, CPA
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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