June 30, 2016 Paul Glantz, CPA

Proposed Increases to the Social Security wage base

The Social Security Administration’s Office of the Chief Actuary (OCA) has projected an increase in the current Social Security wage base from $118,500 (2015 & 2016) to $126,000 for 2017.

This is bad news for those who are self-employed, operating as either a sole-proprietorship or a single-member LLC (SMLLC). Based on this estimate, each self-employed person with at least $126,000 in net self-employment earnings will pay $15,624 in Social Security taxes alone for 2017. This tax will be in addition to medicare taxes and income taxes at the taxpayer’s ordinary marginal rate.

Below are the social security wage base projections for 2017 on:

  • 2017 — $126,000
  • 2018 — $129,900
  • 2019 — $135,900
  • 2020 — $142,500
  • 2021 — $148,800
  • 2022 — $155,100
  • 2023 — $161,700
  • 2024 — $168,300
  • 2025 — $175,200

The OCA is projecting that the Social Security trust fund will become insolvent in 2034. As an entrepreneur, what steps are you taking towards minimizing your exposure to the Social Security Tax?

 

 

Tagged: , , , ,

About the Author

Paul Glantz, CPA Paul Glantz is a Certified Public Accountant licensed in both Texas and New York. Paul has an extensive background in public accounting with a specific focus on individual, fiduciary, and business taxation. Paul currently resides in Austin, Texas.

Leave a Reply

Your email address will not be published. Required fields are marked *