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Ask A CPA - 2016 Tax Law Changes

2016-2017 Social Security Wage Base

In 2016, there is no increase in the Social Security wage base of $118,500. The Social Security tax rate on employers and employees stays at 6.2%. The Medicare tax rate on employers and employees stays at 1.45% on all pay. BUT... In 2017, the Social Security wage base is raised to $127,200. The maximum amount of Social Security tax a taxpayer will pay in 2017 will increase from $7,347 in 2016 to $7,886.40 in 2017. An icrease of $539.40. in 2017, the Social Security tax rate on employers and employees stays at 6.2%. The Medicare tax rate on employers and employees stays at 1.45% on all pay.

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