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The Federal government requires employers to withhold several forms of taxes from all working Americans paychecks including the maximum social security tax. This tax is set up to help the government pay benefits to the elderly and disabled. The Social Security Administration charges 12.4% tax on income and this amount is split between the employee and the employer, each paying 6.2%. For self employed individuals, the entire 12.4% social security tax is required from the individual.
Maximum Amount of Income Taxed
While the tax rate remains at 12.4 % (6.2%) regardless of income level, there is a maximum amount, or ceiling, to the income amount that the social security administration will tax an individual. This rate is subject to change each year.
In 2009 this amount went from $102,000 to $106,500 in income, meaning that anyone who made in excess of this amount still received the same amount of tax regardless of their total income.
Maximum Tax
Based on 2009's maximum income of $106,500 the maximum tax for 2009 is $13,206.
Maximum Amount of Income Taxed
While the tax rate remains at 12.4 % (6.2%) regardless of income level, there is a maximum amount, or ceiling, to the income amount that the social security administration will tax an individual. This rate is subject to change each year.
In 2009 this amount went from $102,000 to $106,500 in income, meaning that anyone who made in excess of this amount still received the same amount of tax regardless of their total income.
Maximum Tax
Based on 2009's maximum income of $106,500 the maximum tax for 2009 is $13,206.
