In my last blog article, I reviewed Federal income tax liability. Today we move to Social Security tax. Almost all workers, whether they work for themselves or someone else, pay Social Security taxes. How much do you pay? Let’s begin with taxpayers who work for someone else. Employees pay Social Security tax of 6.2% on their Social Security wages. This is automatically withheld from pay. Their employers also pay 6.2% of pay for a total of 12.4%. You can see this on your W-2 form, Boxes 3 and 4: This client had Social Security wages (Box 3) of $142,813.91 This number multiplied by 6.2% = Social security tax withheld (Box 4) of $8,854.46 Her employer also paid …
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The Road to ‘Average is Bumpy.
After two posts about spending, specifically spending for joy, I’m back to my regularly scheduled programming: Save, Invest, Repeat. Today, we talk about stock market ‘averages’. Stocks, also known as equities, are the growth engines of investment portfolios. The S&P 500 is a group of stocks from the 500 largest publicly traded companies in the United States. It includes companies you’ve surely heard of such as Apple, Amazon, Tesla, and Berkshire Hathaway (aka Warren Buffett). It also includes companies you’ve likely never heard of such as Cummins, Inc. a company that makes “diesel, natural gas, electric and hybrid powertrains and powertrain-related components” …