Accounting and Tax Services
Oct 19

2008 Social Security Wage Base

The Social Security Administration announced that the 2008 social security wage base will be $102,000, an increase of $4,500 from the 2007 wage base of $97,500. As in prior years, there is no limit to the wages subject to the Medicare tax, so all covered wages are subject to the 1.45% tax. The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, remains at 7.65% for 2008. The maximum social security tax employees and employers will each pay in 2008 is $6,324, an increase of $279 from the 2007 maximum of $6,045. The self-employment tax rate remains 15.3% (combined social security tax rate of 12.4% and Medicare tax rate of 2.9%). In 2008, the maximum social security tax for a self-employed individual will be $12,648, which is $558 more than the 2007 maximum of $12,090. Finally, the threshold for coverage under social security and Medicare for domestic employees will be $1,600 in 2008, up from $1,500 in 2007.

About Reed Tinsley, CPA

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