- Is There a Cap on Two-Earner Social Security Retirement Benefits?
- Do Married Couples Pay More or Less in Payroll or Social Security Taxes?
- Social Security Benefits in a Two-Person Household
- What Is the Difference Between Single & Married Withholding?
- How to Recover Excess Social Security Deductions
- How to Calculate SS Taxes After Pretax Deductions
Unlike income taxes, the amount you owe in Social Security taxes is unaffected by the size of your family or by your tax filing status. Your Social Security tax obligation depends on only one thing: how much income you make. For couples filing joint tax returns, the amount they owe in Social Security taxes depends on each spouse's individual income.
As of 2013, employees pay Social Security taxes of 6.2 percent on earnings up to $113,700. The Social Security Administration defines the wage limit as the "contribution and benefit base," and it's designed to keep pace with increases in wages over time. Social Security taxes apply only to earned income -- income from work. You don't pay Social Security taxes on any earned income in excess of the base or on interest received, dividends and other non-work income. But any income you don't pay Social Security tax on also isn't counted when it comes time for Social Security to figure your benefits.
For a married couple with only one spouse earning income, the maximum in Social Security taxes would be 6.2 percent of $113,700, or $7,049.40. If both spouses earned at least $113,700, then the maximum Social Security tax would be $14,098.80, filing jointly or separately. Social Security taxes don't actually appear on your income tax return -- unless you're self-employed.
While employees pay 6.2 percent of their wages in Social Security taxes, their employers pay an equal amount, so that the total paid on any worker's behalf is 12.4 percent of wages. When you're self-employed, though, you must pay both "halves" of the tax yourself. For a couple with a single earner who's self-employed, the maximum Social Security tax as of 2013 was $14,098.80, or 12.4 percent of $113,700. For a two-earner couple with one self-employed spouse, the maximum was $21,148.20 -- $7,049.40 for the employee and $14,098.80 for the self-employed person. And for a couple in which both spouses were self-employed, the maximum was $28,197.60.
Self-employed people, filing jointly or not, must report their Social Security taxes on their income tax returns using Schedule SE. There, Social Security gets combined with Medicare taxes in what the Internal Revenue Service calls "self-employment tax." Medicare taxes are 1.45 percent of an employee's earned income, with no upper limit, or 2.9 percent for the self-employed. To soften the blow a bit, self-employed people get an income-tax deduction for one-half of their self-employment tax.
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