Fica tax

FICA taxes have two elements. For self-employed persons, there is an equivalent law called the Self-Employed Contributions Act (SECA). Medicare tax the IRS imposes on employee earnings.

These taxes include 12. Department of the Treasury. Social Security taxes, 2.

Withhold $from the employee’s pay and pay a matching portion of $29. Your employer matches these percentages for a total of 15. Code CHAPTER 21— FEDERAL INSURANCE CONTRIBUTIONS ACT.

If you’re an employee, you and your employer split the taxes evenly. In other words, your employer withholds 7. If you are self-employe you pay the entire amount yourself,. It’s called a payroll tax because it takes money out of employees paychecks every pay cycle.

Employers are required both to withhold social security taxes from their employees and to pay a matching amount.

You pay half, and your employer pays half—7. Self-employed individuals must pay a whopping 15. If you file as resident, you get exemption of $4and deduction of $350. There are, however, exemptions available to specific groups of taxpayers.

If you fall under one of these categories, you can potentially save a significant amount of money. However, all these taxes pay for different items like property taxes being used to fund public schools. This tax usually is 6. Employers also pay federal unemployment taxes (FUTA), but no portion of FUTA gets withheld from employee paychecks. Of course, up to this point, you and your employer would each have paid $960. And this rule applies per year.

It’s not based on your lifetime earnings. If your earnings hit $124in mid-December, you’d get a break for a couple of weeks until year’s en. The combined rate is 12.

As an employer, you are required to withhold 6. Taxes are collected by the federal, state and local government to pay for a wide variety of budget items,. As of the time of publication, the regular self-employment tax rate is 15. If you do the math, you will see that you pay 7.

Additionally, you will need to attach a copy. But not all your income is necessarily subject to payroll tax. For example, a contribution might qualify for a 4(k) state income tax exclusion.

FAST WAGE AND TAX FACTS is distributed with the understanding that the publisher is not rendering legal, accounting, tax or other professional services. If legal advice or other assistance is require an attorney, CPA or tax adviser should be consulted. Minimum wage rates may vary by industry and may be superseded by Federal minimum wage rules.