Business Tax Recovery Logo


Tax Deduction Consulting: Social Security Deductions Westbrook ME

Self employed workers are required to pay a Self Employed Workers Tax (SE) that is 15.3% of their income. This is for the FICA taxes as well and, at first glance, it appears they are paying twice as much as an employed worker. This is because the employer is paying an additional 7.65% for their employees. Read on for more.

Guy Edward Fletcher
1 Portland Sq Ste 600
Portland, ME
Specialties
Social Security, Administrative Law
State Licensing
Washington

Gordon P. Gates
(207) 284-9999
110 MAIN ST
SACO, ME
 
Nicolas T Carter
(207) 283-3777
419 ALFRED ST
BIDDEFORD, ME
Specialties
Litigation, Tax, Bankruptcy, Social Security, Foreclosure
Education
University of Maine School of Law,University of Southern Maine
State Licensing
Maine, Massachusetts

Miles Clinton Hunt
(207) 743-6351
266 Main Street
Norway, ME
Specialties
Estate Planning, Social Security, Probate, Wills, Elder Law
Education
University of Maine School of Law
State Licensing
Maine

Kevin M. Noonan
(207) 725-5581
PO Box 5000
Topsham, ME
Specialties
Workers Compensation, Personal Injury, Social Security
Education
Emory University School of Law,Stonehill College
State Licensing
Maine

R Michael Martin
(207) 282-5300
29 Common Street, PO Box 177
Saco, ME
Specialties
Workers Compensation, Social Security, Family, Divorce, Debt Collection
Education
University of Maine School of Law,University of Maine
State Licensing
Maine

James B Smith
(207) 284-4581
PO Box 468
Biddeford, ME
Specialties
Family, Personal Injury, Litigation, Construction, Social Security
Education
Boston College Law School,University of Notre Dame
State Licensing
Maine

Arthur H Dumas
(207) 324-1800
51 Cottage St.
Sanford, ME
Specialties
Personal Injury, Workers Compensation, Social Security, Real Estate, Probate
Education
New England School of Law,Georgetown University
State Licensing
Maine

Nicolas T Carter
(207) 283-3777
419 ALFRED ST
BIDDEFORD, ME
Specialties
Litigation, Tax, Bankruptcy, Social Security, Foreclosure
Education
University of Maine School of Law,University of Southern Maine
State Licensing
Maine, Massachusetts

Ronald A Ducharme
(207) 873-7771
PO Box 376
Waterville, ME
Specialties
Workers Compensation, Insurance, Business, Elder Law, Social Security
Education
California Western School of Law,University of Notre Dame
State Licensing
Maine

Tax Deduction Consulting: Social Security Deductions

Maximum Social Security Deduction

A discussion of the maximum social security deduction would most often center on self employed workers. Employed workers are not allowed to use social security taxes as an itemized deduction.

The Government does not trust us to pay our taxes at the end of each year and so we are on a pay as you go basis. This is the reason for pay roll deductions. New workers are always a little shocked when they get their first paycheck and discover the amount they are actually paid is considerably less than they actually earned. The difference is the Federal, State, and FICA taxes that are withheld from your pay. These taxes are withheld by the employer and sent to the IRS each quarter. The FICA deduction, which includes both social security tax and Medicare tax, amounts to 7.65% of your earnings. There is no maximum social security deduction when computing this withholding figure.

There is, however, a limit on the social security portion. You are only required to pay this tax on the first $97,500 of income each year. If you are fortunate enough to be earning over this amount, the tax will no longer be deducted once the limit is reached. The social security portion of the FICA tax equals 6.2%. The other 1.45% for Medicare has no income limit at all. You continue to pay it regardless of income limit.

Self employed workers are required to pay a Self Employed Workers Tax (SE) that is 15.3% of their income. This is for the FICA taxes as well and, at first glance, it appears they are paying twice as much as an employed worker. This is because the employer is paying an additional 7.65% for their employees. In order to create a bit of parity for the self employed worker who is stuck with the entire amount, 50% of his social security and Medicare taxes may be taken as an itemized deduction when he files his tax return.

The employed worker is not allowed to deduct his FICA taxes from his taxable income as an itemized deduction. Since certain ...

Click here to read the rest of this article from BusinessTaxRecovery.com