fica tax rate for 2011

fica tax rate for 2011 - fica changes for 2011 : The Federal Insurance Contributions Act (FICA) tax is a federal tax on both employees and employers to fund Social Security and Medicare. It’s an even split of 7.65% of the employee’s salary – but only up to a certain cap for the Social Security piece. The limit of only applies to the 6.2% FICA and not to the complete 7.65%. The medicare portion has no upper limit or cap. That’s why it’s important to know what the cap is, especially if you’re on the fringe in a given year.

Based on the table below, an employee making $106,800 or less in any given year can expect to pay the full 7.65% on every paycheck of the year. However, let’s say you make $126,800 in a particular year. You’ll actually see an artificial “raise” of several hundred dollars in your last couple paychecks. In this case, the additional $20,000 over the limit * .062 = $1240 additional cash in hand you’ll see in the final couple paychecks in aggregate.

Payroll Tax Rate Changes for 2011
The Social Security Administration (SSA) has announced that the 2011 social security wage base will remain the same as 2010 which is $106,800. However, the FICA tax rate will change to 4.2% for the employee portion only. As in prior years, there is no limit to wages subject to the Medicare Tax; therefore, all covered wages are still subject to the 1.45% tax. The FICA tax rate, which is the combined social security tax rate of 4.2% and the Medicare tax rate of 1.45%, will change to 5.65% for 2011. The maximum social security tax that employees will pay in 2011 is $4,485.60 and employers will pay in 2011 is $6,621.60. Read More...

Jack Strayer: Festering FICA fiasco
When filing your federal taxes, you probably noticed the box on your W2 form marked FICA. That’s the Federal Insurance Contributions Act, a.k.a. the payroll tax. It is a 7.65 percent tax on your gross income. Employers match the 7.65 percent. You are paying 6.2 percent into your Social Security and the remaining 1.45 percent into Medicare. All the FICA taxes that you pay each year, plus your employer’s matching contribution to FICA, are deposited into Social Security and Medicare. In short, the FICA taxes you pay are funds that cover your Social Security checks and your Medicare benefits after you retire. Read More...

Better ways out there for reducing U.S. debt
For the budget, institute a progressive flat tax, with fewer brackets and considerably lower marginal rates. It needs to be progressive because the poor pay a higher percentage of their income on necessities. It would be a flat tax, so no deductions -- including home mortgage and property tax -- would be allowed. Corporations would pay a minimum 25 percent tax rate. To control spending, total tax revenue (excluding FICA) would be held to 20 percent of GDP; this could be increased only during economic downturns and national emergencies. Any increase would be time-limited. Discretionary spending would be held in check by this 20 percent target. Read More...

What tax rate did YOU pay?
Average income of Top 400 tax filers, 1992: $46.8 million
Average income of Top 400, 2007: $344.76 million

Average tax rate for Top 400, 1992: 26.38 percent
Average tax rate for Top 400, 2007: 16.62 percent

Percent of total income that Top 400 earned through salaries and wages, 1992: 26.22
Percent of income that Top 400 earned through salaries and wages, 2007: 6.53

Cutoff to make Top 400, 1992: $22.76 million (1990 dollars)
Cutoff to make Top 400, 2007 $87.52 million (1990 dollars)
Read More...

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