2012 Max $4,624.20 = 110,100 x 0.042 2013 Max $7,049.40 = 113,700 x 0.062
So the max increase is $2,425.20/year per person.
Assuming you have an employer paying their 6%. I just did it without that piece, since if you're self-employed, you pay that too, and it didn't change.
Thanks to those point out that $700 could be extreme front loaders...but then you'll only be paying that for the first part of the year...
I was thinking about that component, but I figured most people have employers paying the other part. But you are right, the self employed have a much bigger burden.
Post by whitepicketfence on Jan 4, 2013 15:15:22 GMT -5
DH's income is so variable that I haven't done the math yet. He doesn't get paid until next Friday so I'll have to wait a bit to see how it shakes out.
Is that how the withholding works? They don't just withhold based on the monthly equivalent of the SS maximum (6.2% or whatever of $9166, which is 1/12th of $110000/year)
Is that how the withholding works? They don't just withhold based on the monthly equivalent of the SS maximum (6.2% or whatever of $9166, which is 1/12th of $110000/year)
They don't. You pay in each paycheck until you've hit $113,000 of gross income for the year and have paid the max, and then you don't pay any more FICA for the rest of the year.
ETA: but this also means that people who pay all their FICA before the end of the year have an even more pronounced difference between December 2012 paychecks and January 2013 paychecks, because not only do you start paying FICA again, but you'll also pay the increase. That's why I have no idea how to calculate our increase. My first (biweekly) paycheck in 2012 was $1100 less than my last paycheck in 2011 because of FICA coming back in and my 401(k) contributions starting up again, so I'm assuming my next paycheck will be somewhere between $1100 and $1500 less than my last one because of FICA and the FICA increase and contributing to my 401(k) again (I think I had maxed out in early December so my most recent check didn't have 401(k) taken out).
Also, for those who already got paid... I could be totally wrong here, but won't dates of your pay period be relevant here? Like, if you just got paid for the 2-week period ending on Jan 4, aren't you only paying 4 days of 2013 FICA (and 10 days of 2012 FICA), in which case the increase you saw today may be considerably less than what you'll see in your next paycheck?
Also, for those who already got paid... I could be totally wrong here, but won't dates of your pay period be relevant here? Like, if you just got paid for the 2-week period ending on Jan 4, aren't you only paying 4 days of 2013 FICA (and 10 days of 2012 FICA), in which case the increase you saw today may be considerably less than what you'll see in your next paycheck?
Oh wow. I never considered this, although it does make sense. Does anyone know if v is correct? I would imagine we would seeing much more taken out in two weeks then.
Also, for those who already got paid... I could be totally wrong here, but won't dates of your pay period be relevant here? Like, if you just got paid for the 2-week period ending on Jan 4, aren't you only paying 4 days of 2013 FICA (and 10 days of 2012 FICA), in which case the increase you saw today may be considerably less than what you'll see in your next paycheck?
Oh wow. I never considered this, although it does make sense. Does anyone know if v is correct? I would imagine we would seeing much more taken out in two weeks then.
I think all money you are paid in 2013 would be subject to 2013 taxes, no matter what days it was technically earned on.
Also, for those who already got paid... I could be totally wrong here, but won't dates of your pay period be relevant here? Like, if you just got paid for the 2-week period ending on Jan 4, aren't you only paying 4 days of 2013 FICA (and 10 days of 2012 FICA), in which case the increase you saw today may be considerably less than what you'll see in your next paycheck?
AFAIK that's not how it works. The IRS/Feds don't care when you earned the money, they just care when you receive it.
Oh wow. I never considered this, although it does make sense. Does anyone know if v is correct? I would imagine we would seeing much more taken out in two weeks then.
I think all money you are paid in 2013 would be subject to 2013 taxes, no matter what days it was technically earned on.
It should go by the date the check was issued, not the dates of the pay period. If you get paid 1/4/13, all of that income is considered 2013 income, even if it is for days worked in 2012 - you pay 2013 rates on all of it and none of it shows up on your 2012 W-2, for example.
I'm confused. My paycheck went down $100, which is about what I expected from the FICA increase.
The weird part is that, b/c of other things coming out of my paycheck that increased, my check should have gone down about $225. Color me confused, and I can't get to my paystub until Monday.
Wait how can the payroll tax change alone be $700 for some of you guys given that it only applies to $113K in income? Are you just looking at a change in withholding from your last 2012 check to this one?
we weren't paying the SS portion of FICA for most of the year so when Jan. hit we have to start paying it again and this week's paycheck was over $700 less than the one 2 weeks ago.
Wait how can the payroll tax change alone be $700 for some of you guys given that it only applies to $113K in income? Are you just looking at a change in withholding from your last 2012 check to this one?
we weren't paying the SS portion of FICA for most of the year so when Jan. hit we have to start paying it again and this week's paycheck was over $700 less than the one 2 weeks ago.
Wait how can the payroll tax change alone be $700 for some of you guys given that it only applies to $113K in income? Are you just looking at a change in withholding from your last 2012 check to this one?
we weren't paying the SS portion of FICA for most of the year so when Jan. hit we have to start paying it again and this week's paycheck was over $700 less than the one 2 weeks ago.
That totally doesn't count though. The question is not how much payroll tax is costing you, it is how much the payroll tax INCREASE is costing you. So the portion of FICA that is the same as what you paid in January 2012 should be taken out of the equation.
we weren't paying the SS portion of FICA for most of the year so when Jan. hit we have to start paying it again and this week's paycheck was over $700 less than the one 2 weeks ago.
That totally doesn't count though. The question is not how much payroll tax is costing you, it is how much the payroll tax INCREASE is costing you. So the portion of FICA that is the same as what you paid in January 2012 should be taken out of the equation.
you don't think having $700 less this week than 2 weeks ago doesn't hurt :-) (I should be an R)
That totally doesn't count though. The question is not how much payroll tax is costing you, it is how much the payroll tax INCREASE is costing you. So the portion of FICA that is the same as what you paid in January 2012 should be taken out of the equation.
you don't think having $700 less this week than 2 weeks ago doesn't hurt :-) (I should be an R)
Hey, as I said above, I expect (based on my comparison of paychecks from December 2011 v. January 2012) that next week's paycheck will be somewhere around $1500 less than my last paycheck. Of course that doesn't make me super psyched. But much of that has absolutely nothing to do with the payroll tax increase. It has to do with phased-out FICA kicking back in and maxed-out 401(k) contributions coming back into the picture. Therefore, the correct answer to "how much will it affect you?" is "If you mean on a per paycheck basis, fuck if I know, but during some portion of the year they'll get the max additional amount from me."
And also, based on what you say about your financial position, I suspect that paying $2500 each over some portion of the year is really going to hurt you. I'm sure you'll still be able to afford Mandarin lessons and trips to Morocco!
I think all money you are paid in 2013 would be subject to 2013 taxes, no matter what days it was technically earned on.
It should go by the date the check was issued, not the dates of the pay period. If you get paid 1/4/13, all of that income is considered 2013 income, even if it is for days worked in 2012 - you pay 2013 rates on all of it and none of it shows up on your 2012 W-2, for example.
Great! Thanks for clarifying. I was really concerned how much the hit would be if $47 only represented 4/10 of it.
Is that based on individual salary, or per married couple gross income?
$200,000 for individual $250,000 for joint
I assume if two people make $150,000 each, their employer won't be taking the 0.9%, but when they file their return that they will end up owing that additional 0.9% since they will be over the $250,000 joint limit.
Could they make our tax code more complicated?? I feel it is part of my duty as a citizen to pay some taxes, but it shouldn't be this hard to do this. It is just ridiculous.
Is that based on individual salary, or per married couple gross income?
For MFJ it's apparently .9% of everything over $250K per couple. But if you don't individually get there, the employer won't withhold for it of course--so you'll have underpaid.
For MFJ it's apparently .9% of everything over $250K per couple. But if you don't individually get there, the employer won't withhold for it of course--so you'll have underpaid.
Fanfreakingtastic. How do we correct that so we don't underpay? I know how to correct federal withholding, but how to I estimate my AGI for next year so I'll know what amount over $250K we'll be (or is it .9% on gross)? I fear I'm going to have to hire an accountant and I really don't want to.
Isn't that always the game you have to play with changing your withholdings to avoid penalties though? I don't think we'll ever be able to get our withholdings right and we always underpay during the year. My goal is simply to not pay underwithholding penalties, which we've be able to do so far using the IRS calculators.
Bonuses help even out things a bit too, as they're always overwithheld so they balance out our underwithholding elsewhere.
SS, Medicare, and Income Taxes are all really the same pot, despite everyone pretending to the contrary. So if the IRS calculator has worked for you in the past, it still should
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