Millions of Big Earners Should Expect Higher Payroll Taxes in ‘17

shutterstock_260489408

 

For those who have been excited to see their tax bill go down under a Trump administration, there might be cause for some concern, especially for some of the country’s highest earners. That’s because for the millions of workers who pass a certain threshold a tax hike is coming. So why the increase?

First, this change was in place before President Trump won the election in November. This scheduled change comes in the form of an adjustment to Social Security payroll taxes, and it will affect a lot of high earners. Over the past several years, workers have paid a 6.2 percent payroll tax to Social Security, which is matched by employers and automatically deducted from their paychecks.

That number will remain the same in 2017, but there is a catch. It used to be that workers only paid that amount on the first $118,500 they earned for the year. This year, that threshold increases to $127,200. That will amount to hundreds of dollars for anyone affected. Meantime, for self-employment workers, the news is even worse because they are forced to pay the full Social Security tax themselves without splitting the cost with an employer.

So how many people are we talking about? Anyone that makes less than $118,500 won’t be affected but the estimated 12 million workers that make more than that will see a hit, which amounts to one of the biggest changes in the tax code in nearly 30 years.

http://time.com/money/4628475/payroll-taxes-social-security-2017/

Posted in
Thanksgiving week and gratitude

Thanksgiving Week & Gratitude

Thanksgiving week and gratitude Thanksgiving is one of my favorite times of the year because it helps me to remember the many things I have to be grateful for: my family, relatively good health, friends, job, religious freedoms (I should probably use more often), and too many other blessings to list. Not to mention the Thanksgiving…

Charles Sullivan

Charles Sullivan- A Legacy of Football, Entertainment & Medicine

Charles Sullivan, A Legacy of Football, interview transcript, by Alan Olsen for The American Dreams Show: Alan Olsen: Can you share a little about your background with us? Charles Sullivan: Yes, my late father during the Second World War was assigned to the US Naval Academy at Annapolis, Maryland. And he was director of public…

Jory Mack

Jory Mack- Reno Solar

Jory Mack, Reno Solar, interview transcript, by Alan Olsen for The American Dreams Show: Alan Olsen: Can you share a little about your background and how your company, Reno Solar came about? Jory Mack: I was working at a gym and had a friend that, that wanted to be partners. I basically I quit the…

Tax Planning December 2020: Biden vs Trump

Tax Planning December 2020: Biden vs Trump

Tax Planning December 2020: Biden vs Trump Transcript: There is a lot going on in terms of to sorting out the Presidential election right now. Regardless of who becomes President, January 1st is approaching fast and there are still opportunities to take action to do some tax planning before year end. When we’re looking between…