Social Security Tax Will Increase 2% in 2012

Get ready for higher Social Security taxes!
They will go up by 2%, from 4.5% this year to 6.2% next year. But that’s only for people who work for an employer. For self-employed Americans, the bite will be double.
As explained by Bill Bischoff of SmartMoney.com, May 27, 2011:
For 2011, the Social Security tax hit is less because of a one-year 2% point reduction in the Social Security tax withholding rate on wages — from the normal 6.2% to 4.2% (your employer’s 6.2% rate is unchanged). For 2012 and beyond, however, Social Security tax withholding on your wages will jump back to the standard 6.2% rate.
If you’re an employee, your wages are hit with the 12.4% Social Security tax up to the annual wage ceiling. Half the Social Security tax bill is withheld from your paychecks. The other half is paid by your employer. That arrangement is very deceptive because unless you closely examine your pay stubs, you may be blissfully unaware of how much the Social Security tax actually costs because your employer isn’t really paying your Social Security tax. Your employer’s “share” of your Social Security tax is actually part of your entire pay-and-benefits salary package.

While many employees may not realize the magnitude of the Social Security tax, self-employed folks know it all too well. That’s because the self-employed must pay the entire 12.4% tax rate out of their own pockets, based on the amount of their net self-employment income.
For both 2010 and 2011, the Social Security tax self-employment income ceiling is $106,800 (same as the wage ceiling for employees). So if your 2010 self-employment income was $106,800 or more, you paid the Social Security tax maximum of $13,243 last year (12.4% x $106,800 = $13,243).
In 2011, the hit will be less thanks to a one-year 2 percentage-point reduction in the Social Security tax rate on self-employment income — from the normal 12.4% to 10.4%. For 2012 and beyond, however, the Social Security tax on self-employment income is scheduled to return to the standard 12.4% rate.
The SmartMoney.com article’s writer, Bischoff, estimates that in the course of his 35-year working life, he has paid $219,000 in Social Security tax and his employers paid another $41,000. That amounts to $260,000 in total.
Bischoff writes: “if I could get the $260,000 back, stop paying the tax, and forego receiving any benefits, I would do it in a heartbeat. In fact, if I could just stop paying the tax in exchange for walking away from any future benefits, I would do that too. Why? Because I have big doubts I will actually receive the promised level of benefits when the time comes…the system is now projected to run out of money in 2036 unless taxes are raised or benefits are cut.”
I have bad news for Bischoff:
The Social Security system is already broke.
In January this year, the Congressional Budget Office issued a little-noticed report that Social Security will effectively run a $45-billion deficit in 2011 and continue to run deficits totaling $547 billion over the coming decade. See my post on the report HERE.
~Eowyn
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Anonymous
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Anonymous

All you Demo-rat voters out here, happy now? No? Gosh, I wonder why!

Anonymous
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Anonymous

Hey, they’re already raiding Federal retirement accounts because of the debt limit… nothing like other peoples’ money, you know.

DCG
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DCG

eventually you run out of other peoples’ money…”sigh”

themadjewess
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themadjewess

Where are the libo-slime now as Osama hussein has OK’d 40 billion bux to the “Arab-spring”. This money goes directly against US Troops, helping those they fight against.
This is total treason.
WHEN does it end.

hobesoundgal
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hobesoundgal

hopefull it ENDS November 2012

themadjewess
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themadjewess

I know Sage. I dont plan on accepting any 666 mark. Have seen death up close. Better to die and go to be with my Lord than accept the beast and go to hell forever. The more I read the Torah, Tanakh and the New Testament, the more I see the end coming. I wonder if we will see this in OUR lifetime, I am starting to think so. May God protect his people that serve him here in the USA. And have mercy. May God protect the people in Israel, especially those set apart from the 12 tribes of… Read more »

themadjewess
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themadjewess

Yes, I always enjoy it myself when I see a Jewish brother/sister SEE the Messiah. Jesus, himself actually is the one that allowed the blindness b/c of their hardness. “You will not *SEE* me again, not until you learn to cry….” You know the rest. The Jew is blinded and needs to SEE. I have known YeShua, Jesus of Nazareth since I was 22, I am now 46. I was going to put up as my website name; “The Mad Messianic” but I REALLY felt the Lord asking me to enter into the sufferings of his people that are blinded.… Read more »

themadjewess
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themadjewess

Bible scholarship is so poor now, with the easy breezy salvation being preached by Rick Warren <<Isnt he a gasbag!!! Good GOD HELP US! He is horrible. OF COURS the Catholic Bible is the word of God. Let me tell ya. My best friend, Mary, God rest her soul, she died of cancer b/c of bullemia-she was a DEVOUT Catholic- my family was not religious in the least bit. I would not have known A THING about God, Jesus, nada if it were not for her. I used to go to St Rosalies, in Hampton Bays, this is where I… Read more »

Sean
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Sean

“That’s because the self-employed must pay the entire 12.4% tax rate out of their own pockets, based on the amount of their net self-employment income.”
That is misleading. Actually the self employed pay FICA based on 92.35% of their net income. So for compasion purposes the self employed are not paying anymore than an employee who works for someone else.

Annie
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Annie

I get the feeling that the Usurper and his regime wish that most Senior citizens in America (except for the Seniors inside their own families, of course) would simply do them a favor and drop dead, and that they are doing their best to help speed up that process !! Of course, we all realize that the Marxists have been doing their very best to force everyone in America out of business, using each and avenue they possibly can find for a very long time now. (sigh)

J
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J

Distorting reality for political agenda (aside from some of these wackos posting comments.) Social security tax was cut 2% temporarily for one year. It now reverts to the previous level. I guess if I gave my son a temporary increase in his allowance for a couple weeks, after that he would scream that I’m cutting his allowance?

Nancy
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Seems like all the billions being spent overseas on a war that has nothing to do with us, could be spent on the people of the United States, seeing it is us that these billions are coming from as well.

Andy
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Andy

What an idiot this Bischoff is…….he acts like this SS thing is a tax increase…….for God’s sake it was a temporary and stupid move to “put more money in our pockets” but take $120BILLION out of SS for the current and future SS recipients! The self employed have ALWAYS paid the entire amount so that is NOTHING new, he makes it sound like it is new!! It should not be called a payroll tax cut, it is a social security tax payment reprieve for a year, it ain’t no tax cut or increase in taxes………..we MUST stop doing this to… Read more »

frsi
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frsi

SSN is not broke. Read the bi-partisan Simpson-Bowles Commission Report from earlier his year and pay special attention to their recommendations for minor changes, phased in over time, that will keep it solvent for decades. Your article contains numerous inaccuracies. Thanks for the doomsday message, but I’m not buying it and neither does anyone else who knows the facts.

Electric Tools
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Can anybody help me; so how much ss tax would it cost me from my paycheck of 15000?

Blasius Fisher
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Blasius Fisher

That is so terrible about our social security is broke. Why are we paying ss taxes for anyway? What is the younger generations like “X” and beyone the future generations will do for their retirement? If the democrats think they want to get into our retirement funds like 401k or IRA, they better think twice. We will ‘fired’ all of them at the capitol and the white house for their poorest performance, that includes the republicans. We need conservatives and tea parties in the white house and the capitol hill for a really tight budget.

Dorothy Mize
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buy as much gold as possible its the only
thing that keeps up with the inflation rate