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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