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Is social security a regressive or proportional tax?
12.4%. One-half, 6.2%, is withheld from wages. The other half is paid by the employer. The employee tax rate for social security is 6.2% (amount withheld). The employer tax …rate for social security is also 6.2% (12.4% total). The 2008 wage base limit was $102,000; it increased to $108,600 in 2009, and will remain at that base through 2011. FICA contributions, including various sub (categories of things like SS, Disability, Health, etc) are 15.30% of FICA wages. What is considered FICA wages differ from other wage considerations in many ways, (it has a top limit that changes regularly of about 97.5K, how pension contributions factored, State taxes, etc.). If you are an employee, the employer MUST pay half of the contribution (so you only directly pay 7.65%). If you're self-employed, the amount normally paid by the employer is collected through something called the "self-employment tax" when you file your income tax return.
The taxes that you are paying now for for the social security and medicare insurance program are being used to pay for the benefits that the current beneficiaries are receivin…g at this time and also some of the amount is being put into a trust fund that has some government assets for use in the future for your insurance benefits.
Potentially, yes-it depends on your income level. The amount taxed could be very low. In general, up to 50 percent of your SSDI benefits may be taxed, which is determined by a…dding up one-half of your SSDI benefits plus all of your other income sources. For the 2012 tax year, taxes are owed on any amount above a base level of $32,000 for couples filing jointly and $25,000 for individuals. Additionally, SSA benefits can be taxed up to 85 percent if the total of one-half of your benefits and all your other income for the tax year is more than $34,000 if filing single or $44,000 if you are married filing jointly; or if you are married, filing separately and lived with your spouse at any time during the tax year.
Social security disability and social security benefits are the same thing and would be subject to income on your correctly completed 1040 income tax return When you have othe…r sources of world wide income. Generally, if Social Security benefits were your only income, your SSB benefits are not taxable and you probably do not need to file a federal income tax return. If you have any other sources of worldwide income and (tax exempt interest and exempt dividends) then it is possible for some of your SSB to become taxable income on your income tax return and then you would be required to file an income tax return.
Go to the IRS gov website and use the search box for IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Publication 915 is available on the IRS …Web site. Use the search box to choose the 1040 instructions. Page 28 of the 1040 instructions book has the Social Security Benefits Worksheet for Lines 20a and 20b of the 1040 tax form. If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income is more than the base amount for your filing status. For a single taxpayer the base amount (cap) is $25,000. Your taxable benefits and modified adjusted gross income are figured on a worksheet in the Form 1040A or Form 1040 Instruction booklet. You can do the following quick computation to determine whether some of your benefits may be taxable: First, add one-half of the total Social Security benefits you received to all your other income, including any tax exempt interest and other exclusions from income.Then, compare this total to the base amount for your filing status, if the total is more than your base amount, then some of your benefits may be taxable. From 50% to 85% of your SSB can become taxable income on your 1040 income tax return and would be added to all of your other gross income and taxed at your marginal tax rate.
The Social Security Act of 1935 was signed into law by President Franklin D. Roosevelt on August 14, 1935. The government began collecting taxes for Social Security in January… 1937, and began paying regular monthly benefits in January 1940. In 1939, the government added survivors' benefits and benefits for retired spouses and children; disability benefits were added in 1956. President Johnson introduced Medicare as part of his "Great Society" initiative. The bill was signed into law on July 30, 1965. Medicare began signing up beneficiaries on July 1, 1966.
Almost everybody, either through deductions on their paycheck or through self-employment tax.
Read the part in your tax guide that has a simple equation for determining the the amount of social security to report. It is a small fraction of what you actually receive tha…t you need to report as income.
US "C" Corps pay on their Federal Taxable Income (which differs, frequently substantially, from Book or financial income), at a 35% rate. Which means fixed and proportional to… me. State taxes are a different matter. Alternative Minimum Tax (AMT) is applicable too. Improvement: Personal Service Corporations (owner-operated businesses) do pay a flat 35% rate, but most entities that people think of as corporations, i.e. public corporations, pay generally increasing rates as their income increases, other than the weird 39% marginal bump between $100,000 and $335,000. U.S. corporate taxes therefore appear to be progressive for the corporations that get most of the attention related to this issue. However, it is important to remember that corporate taxes are ultimately paid out of selling prices, so consumers are indirectly paying them. Selling prices on most goods and services are not adjusted by income level, so the poor and the wealthy pay the same amount of corporate tax when they purchase identical goods. In that sense, the corporate tax could be argued to be regressive, especially since the poor spend most of their paychecks on products and services, while middle class and wealthy people are able to save.
Yes it is very possible for 50% to 85% of your SSB to become taxable income on your 1040 federal income tax return and added to all of your other gross world wide income and b…e tax at your marginal tax rate amount.
Social Security earnings are not taxed.
Regan ans It is taxed NOW, if the recepient receives above an amount of income otherwise. It USED to be not taxed.
Social Security Taxes are a Proportional Tax. A Percentage of a person's income is paid to Social Security, this is half of the total amount paid to them, the Other half of a …person's Social Security Tax is paid by the Employer.
Payroll taxes are proportional, aka, progressive. A progressive tax recognizes that high income earners are more able to pay taxes than their low income counterparts, and that…, in order to pay their fair share, they must pay a greater proportion of their (large) incomes to the state than that proportion paid by low earners. By contrast, Sales taxes are regressive, because by taxing consumption at the same rate regardless of an individuals income & wealth circumstances, they are effectively taking a greater proportion of low earners disposable cash. The moral principle here is fundamental to the split between American Conservatives (Republicans) and Liberals (Democrats.) In general, the Right Wing of the Republican party beliefs that property rights are above all sacrosanct, while the Left Wing of the Democratic party sees social justice as an essential goal of government, as well as a practical necessity for a modern economy. The terms progressive and regressive can be used in a mix and match fashion. A "luxury tax" is a progressive version of a sales tax... the rationale is that, because items such as foreign sports scars, yachts, and $10m homes are typically bought by high income individuals, the state can achieve some level of social justice by levying special taxes on these items. Still, your point of view influences whether you see a tax as progressive or regressive. Billionaire Larry Ellison can pay the luxury tax on his yacht much more easily than millionaire Joe Blow could on a similar boat. Thus a truly progressive luxury tax would means test the buyer (eg, use the AGI off his 1040) and charge him a proportionately higher amount. In a just (leftist) society, the graduated luxury tax would be so severe that the absolute best yacht Ellison would be able to afford would be nearly the same as everyone else's boat. Value Added Taxes (VAT) are a European thing, and thus not worth discussing here.