FIVE MINUTE TAX BRIEFING

PPC

Five-Minute Tax Briefing®
October 22, 2019
No. 2019-20

Social Security Wage Base Increases for 2020:  The Social Security Administration (SSA) has announced that the maximum earnings subject to the Social Security component of the FICA tax will increase from $132,900 to $137,700 for 2020. This means that for 2020, the maximum Social Security tax that employers and employees will each pay is $8,537.40 ($137,700 x 6.2%). A self-employed person with at least $137,700 in net self-employment earnings will pay $17,074.80 ($137,700 x 12.4%) for the Social Security part of the self-employment tax. The Medicare component remains 1.45% of all earnings, and individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly, $125,000 for married filing separately) will pay an additional 0.9% in Medicare taxes. Other 2020 cost-of-living adjustments announced by the SSA are available at www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2020.html . SSA Release 10/10/19.

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