New FICA wage limit for 2017

The new wage limit that is subject to the federal Old-Age, Survivors, and Disability Insurance (OASDI) has increased to $127,200 for the 2017 tax year, up from $118, 500 in 2016. Also known as Social Security, this program taxes all workers who have earned income, such as payroll wages or self-employment income.

Client Alert TagThe OASDI tax rate for wages paid in 2017 is set by statute at 12.4 percent. 6.2 percent is paid by the employee, and 6.2 percent is paid by the employer. This means that an individual with wages equal to or larger than $127,200 would contribute $7,886.40 to the OASDI program in 2017, and his or her employer would contribute the same amount. A self-employed person would pay both the employee and the employer portions themselves.

Medicare tax, which together with OASDI comprises “FICA” on your pay stub, does not have a wage limitation. Medicare tax remains, as in years past, at 2.9 percent of earned income, where 1.45 percent is paid by the employee, and 1.45 percent is paid by the employer. Workers are also required to pay an additional .9 percent Medicare tax for earned income above $200,000 ($250,000 if married filing jointly).

For more information, visit the Social Security Administration website. If you have any questions regarding how this may affect you, please contact your WK advisor at (573) 442-6171 or (573) 635-6196.

FEDERAL JUDGE TEMPORARILY SUSPENDS NEW OVERTIME RULES SET TO TAKE EFFECT DEC. 1. On Tuesday, November 22, 2016, a federal judge issued a preliminary injunction against Department of Labor’s overtime regulation that would raise the salary threshold, below which workers automatically qualified for overtime pay, to $47,476 a year. This new overtime regulation  was set to take effect next week, on December 1.
YEAR-END TAX PLANNING FOR INDIVIDUALS. It’s that time of the year again – time to start thinking about the upcoming tax season. You have a few different strategies available to reduce your current year income tax burden. You might be able to: defer your income to be recognized in a later year; accelerate your deductions to be recognized in the current year; or apply for tax credits.
WHAT HAPPENS WHEN YOU HAVE LOSSES IN AN IRA? It’s certainly commonplace that investments lose value from time to time.  What does that mean when the investment is in your Individual Retirement Account?

Posted 12-2-2016 | Topics: Client Alerts, News,

Our thoughts and prayers are with all of our clients, friends and the communities across the state of Missouri impacted by the storms, tornadoes and flooding that have hit our state.
Our collective resolve will carry us through the coming months as we work to restore what was lost.