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Every time that you get your paycheck, you notice several items removed. Usually there's state and federal tax, a local tax if you have one, Old-Age Survivors and Disability Insurance (OASDI) and Medicare tax. OASDI and Medicare tax are both part of FICA, the Federal Insurance Contributions Act, also called Social Security tax. The... more »
The Social Security tax is actually two taxes. One is used to provide retirement, survivor's and disability pensions. The other, the Medicare tax, is used to supplement the premiums paid by those who are eligible for Medicare insurance. Most workers and employers are required to pay Social Security tax. Whether you are among them or... more »
According to the IRS, overpayment of Social Security taxes is quite common, especially if you change jobs during the year or work for more than one employer. If you did pay more than the annual Social Security tax limit of $6,324, you can claim the excess amount on your tax return. The overpayment will be calculated with your other... more »
The adoption tax credit passed by Congress and signed into law by President Clinton in 1996 is one of the more complicated tax laws related to middle-income families. Generally speaking, it provides a tax credit to families who made out-of-pocket expenses related to the adoption of a child other than that of a spouse. Unlike a tax... more »
If you are already an accomplished chef and love spending time in the kitchen, starting your own catering business at home might seem like a natural step to take. A catering business can be relatively simple to start compared to other businesses because it doesn't require a lot of specialized equipment or inventory. On the other... more »
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Employers deduct federal, state, Social Security and Medicare taxes from your gross income before issuing you a check for the net amount. The... more »
Social Security is a federal program designed to provide health care assistance and unemployment benefits for elderly U.S. citizens. The program... more »
Social Security tax is collected from basically everybody who earns money in the United States. The money is used to fund the federal Social... more »
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The Social security tax (officially known as FICA) that is cut from an employee's paycheck is where that employee's Social Security retirement... more »
Social Security is a social insurance program designed to pay benefits to the elderly and disabled. The taxes are collected via payroll deduction... more »
The Federal Insurance Contributions Act (FICA) tax () is a United States payroll (or employment) taxThe FICA tax is imposed under the Federal Insurance Contributions Act, which is codified as imposed by the federal government on both employees and employers to fund Social Security and Medicare —federal programs that provide benefits for retirees, the disabled, and children of deceased workers. Social Security benefits include old-age, survivors, and disability insurance (OASDI); Medicare provides hospital insurance benefits. The amount that one pays in payroll taxes throughout ones working career is indirectly tied to the social security benefits annuity that one receives as a retiree. This has led some to claim that the payroll tax is not a tax because its collection is tied to a benefit.Kevin A. Hassett, March 29, 2005, "Is the Payroll Tax a Tax?" National Review Online, at . The United States Supreme Court decided in Flemming v. Nestor (1960) that no one has an accrued property right to benefits from Social Security.
The Federal Insurance Contributions Act is currently codified at Title 26, Subtitle C, Chapter 21 of the United States Code. from the Legal Information Institute at Cornell Law School
How the tax is calculated
Overview
The Center on Budget and Policy Priorities states that three-fourths of taxpayers pay more in payroll taxes than they do in income taxes. by David Kamin and Isaac Shapiro, Center on Budget and Policy Priorities, Revised September 13, 2004 The FICA tax is considered a regressive tax on income (with no standard deduction or personal exemption deduction) and is imposed (for the year 2009) only on the first $106,800 of gross wages. The tax is not imposed on investment income (such as interest and dividends).
"Regular" employees (most wage-earners)
For 2008, the employees share of the Social Security portion of the tax is 6.2% of gross compensation up to a limit of $102,000 of compensation (resulting in read more at » http://en.wikipedia.org/wiki/Federal+Insurance+Contributions+Act+tax
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