Social Security earnings subject to Social Security tax increases to $102,000 from $97,500


The Social Security Administration has recently announced the COLA adjustments based on the changing consumer prices will be 2.1%, effective January 1, 2008.  As a result the maximum Social Security taxes withheld from an employee’s wages will be $6,324 ($12,648 when combined with the employer’s portion).  This amount is in addition to the 1.45% withheld for Medicare taxes (2.9% when combined with the employer’s portion). 


Recipients will also see a 2.3% increase in benefits.  This will be offset by a 3.1% increase in the Medicare premiums deducted from Social Security benefits.


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