Other Taxes Withheld From Your Paycheck
Take a look at your most recent pay stub. You’ll notice that there are other taxes withheld from your paycheck other than the Social Security tax. For example, federal income tax is withheld from your pay, because Uncle Sam like to get his cut a little bit at a time . State income taxes will also be withheld, unless you live in a state without an income tax.
You also have a Medicare tax taken out of your wages. This tax is equal to 1.45% of your pay. Unlike the Social Security tax, there is no cap on wages to which the Medicare tax applies. So, even if you earn more than $160,200 in 2023, you’ll pay the 1.45% Medicare tax on all your wages. In fact, if you make too much money, you have to pay even more in Medicare taxes. That’s because workers must also pay an additional 0.9% Medicare surtax on wages over $200,000 for singles and $250,000 for married couples filing a joint tax return .
Refund Of Taxes Withheld In Error
If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund.
If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Attach the following items to Form 843:
- A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld,
- A copy of the page from your passport showing the visa stamp,
- If applicable INS Form I-538, Certification by Designated School Official, and
- A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or that you authorized your employer to claim. If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer.
Understanding The Value Of Annuities
People typically buy annuities from an insurance company as long-term investments to generate retirement income.
There are several advantages to this strategy. For instance, buying guaranteed income to cover some or the entirety of your retirement allows you to take on more risk in other parts of your portfolio, thereby generating higher returns over the long haul.
Retirees also benefit from the knowledge that they wont outlive their savings. Many financial planners recommend buying enough guaranteed income so that together with your Social Security benefits, youre able to cover your essential household expenses, such as housing and food.
However, less than a fifth of households between the ages of 40 and 85 own an annuity, so this logic hasnt been terribly persuasive. That folks would benefit from some type of annuity, but fail to purchase one, is whats known as the annuity puzzle and has been studied for the better part of sixty years.
One common concern people share about annuities is the potential for missing out on market gains. What if stocks enjoy a prolonged bull market, such as between 2009 and 2020, and I miss out on it because I tied my money up in annuities?
If the markets do very well after you retire, then you wont get the value from those products, said Spencer Look, associate director of Retirement Studies and Public Policy at Morningstar.
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Why Do I Pay Social Security Tax
Workers pay Social Security taxes to support government programs in society. Social Security benefit payments issued by the government to retired individuals are funded using the aid of Social Security tax payments from current workers. When current workers retire, they will then become eligible to claim these government benefits in the future.
Tips For Saving For Retirement
- If youre feeling overwhelmed by the age and eligibility requirements for Social Security benefits, our Social Security calculator may help. After you fill in your info, well tell you what you can expect in annual benefits once you retire.
- In any retirement conversation, its important to be mindful of the retirement tax laws in the state you live in. Taking your states laws into account can make a significant difference as you plan for retirement.
- If you already have some money to spare, you could grow it with the help of a financial advisor. To find the right one for you, try SmartAssets advisor matching tool. Based on your financial profile and goals, the tool will recommend up to three qualified financial advisors in your area.
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Who Can File For A Refund
In addition to nonresident federal tax filers, you are also not subject to Social Security or Medicare tax withholding on your wages if:
- you have on-campus employment, or
- you are authorized for Curricular Practical Training or Optional Practical Training , or
- you are authorized for employment due to Economic Hardship
If these taxes were withheld from your paycheck in error, you will need to request a refund. See the section below for more information.
Louisette Geiss: A Lawsuit And A Musical
All in all, Louisette Geiss considers herself one of the luckier ones: When she tried to run out of a hotel room to escape Harvey Weinstein’s alleged advances, the door opened. She was able to flee.
But fighting through the justice system an experience that has deeply frustrated her was not the only means by which Geiss has attempted to cope. She’s also written a musical.
“The Right Girl” was waylaid by the pandemic but will be produced live onstage sometime in 2023. The show, with a high-profile production team that includes songwriter Diane Warren, tells the story of three women at various levels of power in a workplace plagued by a serial sexual predator.
“In the end, you see that the judicial system is still not in the right place to take him down,” Geiss said. “It’s really society that takes him down.”
It’s a reflection of Geiss’ view that the latter has moved faster than the former to absorb the lessons of #MeToo, albeit still imperfectly.
“I think the MeToo movement definitely gave predators pause to act on their inclinations,” she said. “I think that they have been warned. And so they are less likely to do it, but I do think they’re still doing it.”
At times, yes, she regrets coming forward. She worries about the effects on her children, now 7 and 5 her youngest was only weeks old when the case exploded. But it was also her children that made her realize she had to fight.
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Reducing Cost Of Living Adjustment
At present, a retiree’s benefit is annually adjusted for inflation to reflect changes in the consumer price index. Some economists argue that the consumer price index overestimates price increases in the economy and therefore is not a suitable metric for adjusting benefits, while others argue that the CPI underestimates the effect of inflation on what retired people actually need to buy to live.
In 2003 economics researchers Hobijn and Lagakos estimated that the social security trust fund would run out of money in 40 years using CPI-W and in 35 years using CPI-E.
How Social Security Benefits Are Taxed
For individuals with more than $34,000 in combined income and couples with over $44,000, up to 85% of their Social Security benefits may be taxed.
Because the thresholds are not adjusted for wage growth or inflation, over time that has pushed more Social Security beneficiaries to pay taxes on their benefits, according to the Center for Retirement Research at Boston College.
When taxes on benefits were first introduced in 1983, just 8% of eligible families paid taxes on benefits. In 2021, that had climbed to an estimated 56%, according to the Center for Retirement Research. With moderate inflation, that was projected to increase to 58% in 2030.
“If inflation rises faster, Social Security benefits will be even higher in nominal dollars and more families will pay on more benefits further reducing the net benefit,”wrote Alicia Munnell, director of the Center for Retirement Research, and research associate Patrick Hubbard.
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Who Is Exempt From Paying Social Security Tax
Certain individuals may claim an exemption and not be required to pay Social Security taxes. Some religious groups that openly oppose Social Security benefits may claim a religious exemption. Non-resident aliens may be exempt depending on their type of visa. Students working at their university may be exempt. Last, workers for a foreign government may be exempt under certain circumstances. If you believe you may fall into one of these groups, consult your tax advisor.
Where And How Do You Report Social Security Tax
Most employers must report FICA taxes and federal income tax withholding on a quarterly basis using Form 941, Employers Quarterly Federal Tax Return. Report the total amount withheld and contributed for Social Security for all employees.
Some employers can use Form 944, Employers Annual Federal Tax Return, to report Social Security taxes withheld and contributed. The annual form also reports Medicare and federal income taxes. The IRS notifies applicable employers if their business qualifies to use Form 944. Typically, applicable employers are those with a total federal income, Social Security, and Medicare tax liability of less than $1000 annually. Do not use Form 944 unless the IRS tells you to.
After you complete the appropriate form, mail it to the IRS. Use the IRS Form 941 website to determine where to file your quarterly return. Annual filers can use the IRS Form 944 website for more information on where to mail their return.
By January 31 each year, you will give each of your employees a Form W-2. This form lists the amount of all the employment taxes you withheld from their wages during the previous year.
You will also submit Form W-2 and Form W-3 to the Social Security Administration, which records the taxes withheld for the year. Forms W-2 and W-3 must be filed by January 31. You may also have to submit these forms to the state tax agency.
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Justice Dept Seeks End To Arbiter’s Review Of Trump Docs
WASHINGTON The Justice Department asked a federal appeals court on Friday to overturn a judge’s appointment of an independent arbiter to review documents seized during an FBI search of former President Donald Trump’s Florida estate.
The appeal is the latest salvo in weeks of litigation over the scope of duties of the arbiter, also known as a special master. He was assigned last month by a judge to inspect the thousands of records taken in the Aug. 8 search of Mar-a-Lago and weed out from the investigation any that may be protected by claims of legal privilege.
The special master process has caused some delays to the Justice Department’s investigation into the storage of top-secret documents at the home. But a major hurdle was cleared last month when the U.S. Court of Appeals for the 11th Circuit lifted a temporary bar on the department’s ability to use the seized classified documents as part of its criminal probe.
The move permitted a core aspect of the probe to resume, greatly reducing the chances that the special master process could have a significant impact on the investigation. But department lawyers returned to the court Friday to ask for the entire special master review to be shut down, saying the judge who made the appointment had no basis for doing so and Trump was not entitled to an independent review of the seized records or to claim privilege over them.
“Accordingly,” they added, “the special-master review process is unwarranted.”
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What States Tax Social Security
Depending on your total retirement income and filing status, your state may charge income taxes on your benefits. Find out what states tax Social Security.
Social Security is one of the primary sources of retirement income for most retirees. Though retirees expect a tax-free retirement, Social Security benefits are subject to income taxes from the federal government up to a specific limit. Some state governments also impose income taxes on Social Security benefits.
Twelve states tax some or all of Social Security benefits. These states are Colorado, Nebraska, Connecticut, Utah, Kansas, Minnesota, Vermont, Missouri, Montana, New Mexico, Rhode Island, and West Virginia. Each of these states has different income thresholds where benefits are subject to state-level income taxes, while a few of these states are gradually phasing out income taxes on Social Security benefits.
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Trump Deposed In Defamation Suit Filed By Rape Accuser E Jean Carroll
Donald Trump has insisted a woman who is suing him for defamation after he denied her claims he raped her in the 1990s was “not type”.
NEW YORK Former President Donald Trump answered questions under oath Wednesday in a lawsuit filed by E. Jean Carroll, a magazine columnist who says the Republican raped her in the mid-1990s in a department store dressing room.
The deposition gave Carroll’s lawyers a chance to interrogate Trump about the assault allegations as well as statements he made in 2019 when she told her story publicly for the first time.
Details on how the deposition went weren’t immediately disclosed.
Were pleased that on behalf of our client, E. Jean Carroll, we were able to take Donald Trumps deposition today. We are not able to comment further,” said a spokesperson for the law firm representing her, Kaplan Hecker & Fink.
Trump has said Carroll’s rape allegation is a hoax and a lie.
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Vermonts Social Security Exemption
Vermonts personal income tax exemption of Social Security benefits reduces tax liabilities mainly for lower- and middle-income Vermonters who are retired or disabled. It does this by excluding from taxable income all or part of taxable Social Security benefits reported on the federal Form 1040, U.S. Individual Income Tax Return, which are included in federal AGI. The exemption does not exclude other types of income.
For those who are married filing jointly and civil union partner filing jointly, the exemption applies in full up to an AGI of $60,000, phases out between $60,000-$70,000, and does not apply to filers with AGI greater than or equal to $70,000. For all other filing statuses, the Vermont exemption applies in full to an AGI up to $45,000. It then phases out smoothly for filers earning between $45,000-$55,000. It does not apply to filers with AGI greater than or equal to $55,000. The exemption reduces a taxpayers Vermont taxable income before state tax rates are applied.
Table 2 illustrates how the Vermont exemption is applied by filing status and income level. Graph 1 shows the percentage of taxable Social Security benefits that are exempt from Vermont taxable income based on filing status and AGI.
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How Is The Size Set For Social Security Benefits
Through a complicated formula that takes into account several factors, including how much a worker made in their 35 highest-earning years. Generally, those who made more money and those who wait longer to start getting Social Security get larger benefits, up to a point.
This year, the maximum allowed benefit for someone who retired at full retirement age is $3,345 monthly.
Restructuring Social Security Taxes
The $100 billion in surplus accumulated by the Social Security Trust Fund each year has led some to call for tax cuts. This brief argues that if taxes are to be cut, priority should be given to exempting the first $5,000 of earnings from Social Security taxes for youth. Such an exemption would reduce the regressivity of the Social Security tax system and improve work incentives for those with low earnings. Targeting the tax exemption to youth would more than double the improvement in work incentives for a given loss in tax revenue. This is because young people are more likely than prime-age workers to earn under $5,000 annually, and are more responsive to improved work incentives. If policymakers decide to save the surplus for future generations, they could improve work incentives and equity by incorporating a youth tax exemption within a revenue-neutral Social Security tax reform.
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Putin Declares Martial Law In Annexed Regions Of Ukraine
MOSCOW Russian President Vladimir Putin declared martial law Wednesday in the four regions of Ukraine that Moscow annexed and given additional emergency powers to the heads of all regions of Russia.
Putin didnt immediately spell out the steps that would be taken under martial law, but said his order was effective starting Thursday. His decree gives law enforcement agencies three days to submit specific proposals.
After a wave of attacks on Kyiv with what Ukraine says are Iranian-made “kamikaze” drones, protesters gathered outside the Iranian embassy in the Ukrainian capital Monday evening to demand Iran stop supplying Russia with the deadly weapons, accusing Tehran of supporting terrorism and contributing to the deaths of civilians.
We are working to solve very difficult large-scale tasks to ensure Russias security and safe future, to protect our people, Putin said in televised remarks at the start of a Security Council meeting. Those who are on the frontlines or undergoing training at firing ranges and training centers should feel our support and know that they have our big, great country and unified people behind their back.
The upper house of Russia’s parliament was set to quickly seal Putins decision to impose martial law in the four regions. Draft legislation indicates it may involve restrictions on travel and public gatherings, tighter censorship and broader authority for law enforcement agencies.
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