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In this article, we’ll discuss what FICA taxes are, how they’re applied and who’s responsible for paying them. FICA taxes include the Social Security tax of 6.2% (on wages up to $147,000), and 1.45% toward the Medicare tax. Both employers and employees are each responsible for paying this combined 7.65% of gross earnings for a […]

FICA taxes collected today help fund benefits for current retirees and other beneficiaries, and any unused money goes into the Social Security trust fund to help pay future benefits. A Form 1040 return with limited credits is one that’s filed using IRS Form 1040 only (with the exception of the specific covered situations described below).

In this article, we’ll discuss what FICA taxes are, how they’re applied and who’s responsible for paying them. FICA taxes include the Social Security tax of 6.2% (on wages up to $147,000), and 1.45% toward the Medicare tax. Both employers and employees are each responsible for paying this combined 7.65% of gross earnings for a

Medicare taxes, on the other hand, don’t have a wage limit. But there’s an Additional Medicare Tax that high-income individuals must pay. Fortunately, if you’re self-employed, you’ll get to deduct half of the tax (7.65%) when you file your tax return. The self-employment tax deduction is an above-the-line deduction that you can use to lower