It also covers disability benefits for people who have been unable to work for at least 12 months due to medical or physical impairment. Social Security also pays survivor benefits to widowed spouses and the children of deceased workers.
For and , the rate is 6. The federal government defines a ceiling on how much income is required for Social Security taxation. This maximum limit is referred to by Social Security as the contribution and benefit base. It's also used to calculate benefits for workers with higher incomes. People who receive these exemptions must be part of a specific group, such as employees of foreign governments and members of certain religious sects that are officially opposed to Social Security benefits.
As of , the employee's share of the Social Security tax is 4. However, the lower rate for employees will revert back to 6. Companies withhold Social Security taxes from their employees' paychecks. If you work as an independent contractor, your employer won't withhold any money from your income taxes.
However, that doesn't mean you get off tax-free. Instead, you're responsible for paying self-employment taxes, which means you have to pay both the employee and employer share of the Social Security tax. Discounted offers are only available to new members. Stock Advisor will renew at the then current list price. Investing Best Accounts. Stock Market Basics. Stock Market. Industries to Invest In. Getting Started. Planning for Retirement.
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