The Social Security Administration recently announced monthly social security and supplemental security income benefits (SSI) will increase in 2013 by 1.7%. This increase is based upon the Consumer Price Index over the past 12 months ending in September 2012. In addition, other figures based on the national average wage index will also be changed. A recap of the key amounts is outlined here:
2013 Key Social Security Benefits
What does it mean for you?
- Up to $113,700 in wages will be subject to Social Security Taxes (up $3,600 or $446 in additional tax per employee)
- The average Social Security retirement beneficiary will receive an additional $252 in 2013.
- For all retired workers receiving Social Security retirement benefits the average monthly benefit of $1,240/mo. in 2012 will become $1,261/mo. in 2013.
- SSI (Supplemental Security Income) is the standard payment for people in need. To qualify for this payment you must have little income and few resources ($2,000 if single/$3,000 if married).
- A full-time student who is blind or disabled can still receive Supplemental Security Income (SSI) benefits as long as earned income does not exceed the student exclusion amounts listed above.
Warning: There’s also a 2% withholding increase!
Remember to plan for the expiration of the temporary payroll tax cut at the end of 2012. This will be automatically reflected in your paychecks beginning in 2013:
Note: The above tax rates are a combination of Social Security (4.20% in 2012; 6.20% in 2013) and 1.45% for Medicare. There is also a Medicare .9% wages surtax that is scheduled to begin in 2013 for those with wages above $200,000 single ($250,000 joint filers) that is not reflected in the 2013 figures. Please recall that your employer also pays Social Security and Medicare taxes on your behalf. These figures are reflected in the self-employed tax rates, as self-employed individuals pay both halves of the tax.
For assistance with this or other tax or accounting matters please contact us at 201-947-8081 or 646-688-2807, or email us at info@ourcpas.com