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
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…

the new normal for a successful mindset

The New Normal for a Successful Mindset

What is the new normal for a successful mindset?  The pandemic has forced us to think differently and to quickly adapt to changes we would have previously considered very unlikely. It is not good luck, rather a strong and responsible leadership ethic of any company fully prepared to change to a Work-from-home scenario when the…

2020 Tax Planning

Tax Planning In November 2020

Tax planning in November 2020. Depending on who gets into office, there will be notable differences in philosophy of the direction things are going. After a year of unprecedented government spending amid the coronavirus pandemic, how revenue for the government will be collected into the future will matter. We’ve already seen several states take on…

Tax Planning No Matter Who Won

Tax Planning No Matter Who Won

Tax planning no matter who won… We have uncertainty in the air with who is going to be president- depending if you’re asking the Republicans or the Democrats, they will both tell you, their candidate is going in. Nevertheless, while we’re in this state of influx, trying to get things sorted out on both sides,…