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October 22, 2014

Tip of the Week: Social Security Administration Announces 2015 Increases

Filed under: News — Tags: , , , , , — Vision @ 5:29 pm

The Social Security Administration announced today that the Maximum Taxable Earnings or Social Security Wage Base would increase from $117,000 in 2014 to $118,500 in 2015.

Social Security Increases Based on CPI Change

Since there was a 1.7% increase in the Consumer Price Index (CPI-W) from the third quarter of 2013 to the third quarter of 2014, the Social Security Administration announced a 1.7% cost-of-living adjustment for 2014. This compares to a 1.5% increase in 2014. The wage base increase is based on an increase in the national average wage index. Wages are taxed at 6.2%, so the maximum tax to be paid by each employee at that rate would be $7,347.00. About 6% of workers who pay Social Security Tax are expected to reach the maximum in 2015.

Retirement Earnings Test Exempt Amounts Increase for 2015

For workers under full retirement age who are receiving Social Security benefits, $1 in benefits is withheld for every $2 above the Retirement Earnings Test Exempt Amount of $15,480 per year or $1,290 per month in 2014. This will increase to $15,720 per year or $1,310 per month for 2015. The year an individual reaches full retirement age, $1 in benefits is withheld for every $3 above the Retirement Earnings Test Exempt Amount of $41,400 per year or $3,450 per month in 2014. This will increase to $41,880 per year or $3,490 per month for 2015. The month an individual reaches full retirement age there is no limit on earnings.

Quarter of Coverage Amounts Increases to $1,160

Also increasing for 2015 is that amount needed to earn a Social Security credit, formerly known as a quarter of coverage. In 2014, a credit is earned for every $1,200 of earnings, up to a maximum of four credits. That amount will increase to $1,220 for 2015.

Social Security Monthly Benefits to Increase in January 2014

The maximum benefit for a worker retiring at full retirement age is also increasing from $2,642 to $2,663. See the table below for other changes in Social Security benefits for 2015.

2015 Social Security Benefits

20142015
Maximum Benefit:
Worker Retiring at Full Retirement Age$2,642 per month$2,663 per month
SSI Federal Payment Standard:
Individual$721 per month$733 per month
Couple$1,082 per month$1,100 per month
SSI Resources Limit:
Individual$2,000$2,000
Couple$3,000$3,000
SSI Student Exclusion:
Monthly Limit$1,750$1,780
Annual Limit$7,060$7,180

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on the Social Security changes for 2015 or get further information at Important Facts and Figures.

October 30, 2013

Tip of the Week: Social Security Administration Announces 2014 Increases

Filed under: News — Tags: , , , , , — Vision @ 12:09 pm
Acting Commissioner of Social Security Carolyn W. Colvin
Acting Commissioner of Social Security Carolyn W. Colvin
The Social Security Administration announced today that the Maximum Taxable Earnings or Social Security Wage Base would increase from $113,700 in 2013 to $117,000 in 2014.

Social Security Increases Based on CPI Change

Since there was a 1.5% increase in the Consumer Price Index (CPI-W) from the third quarter of 2012 to the third quarter of 2013, the Social Security Administration announced a 1.5% cost-of-living adjustment for 2014. This compares to a 1.7% increase in 2013. The wage base increase is based on an increase in the national average wage index. Wages are taxed at 6.2%, so the maximum tax to be paid by each employee at that rate would be $7,254.00. About 6% of workers who pay Social Security Tax are expected to reach the maximum in 2014.

Retirement Earnings Test Exempt Amounts Increase for 2014

For workers under full retirement age who are receiving Social Security benefits, $1 in benefits is withheld for every $2 above the Retirement Earnings Test Exempt Amount of $15,120 per year or $1,260 per month in 2013. This will increase to $15,480 per year or $1,290 per month for 2014. The year an individual reaches full retirement age, $1 in benefits is withheld for every $3 above the Retirement Earnings Test Exempt Amount of $40,080 per year or $3,340 per month in 2013. This will increase to $41,400 per year or $3,450 per month for 2014. The month an individual reaches full retirement age there is no limit on earnings.

Quarter of Coverage Amounts Increases to $1,160

Also increasing for 2014 is that amount needed to earn a Social Security credit, formerly known as a quarter of coverage. In 2013, a credit is earned for every $1,160 of earnings, up to a maximum of four credits. That amount will increase to $1,200 for 2014.

Social Security Monthly Benefits to Increase in January 2014

The maximum benefit for a worker retiring at full retirement age is also increasing from $2,533 to $2,642. See the table below for other changes in Social Security benefits for 2014.

2014 Social Security Benefits

20132014
Maximum Benefit:
Worker Retiring at Full Retirement Age$2,533 per month$2,642 per month
SSI Federal Payment Standard:
Individual$710 per month$721 per month
Couple$1,066 per month$1,082 per month
SSI Resources Limit:
Individual$2,000$2,000
Couple$3,000$3,000
SSI Student Exclusion:
Monthly Limit$1,730$1,750
Annual Limit$6,960$7,060

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on the Social Security changes for 2014 or get further information at Important Facts and Figures.

October 16, 2012

Social Security Administration Announces 2013 Increases

Filed under: News — Tags: , , , , — Vision @ 9:59 am
Commissioner of Social Security, Michael J. Astrue
Commissioner of Social Security, Michael J. Astrue
The Social Security Administration announced today that the Maximum Taxable Earnings or Social Security Wage Base would increase from $110,100 in 2012 to $113,700 in 2013.

Social Security Increases Based on CPI Change

Since there was a 1.7% increase in the Consumer Price Index (CPI-W) from the third quarter of 2011 to the third quarter of 2012, the Social Security Wage Base will also increase by 1.7%. This compares to a 3.6% increase in 2012. Wages are scheduled to be taxed at 6.2%, so the maximum tax to be paid by each employee at that rate would be $7,049.40. There is a proposal to keep the current rate of 4.2% for employees, but it has not passed at this time. About 6% of workers who pay Social Security Tax are expected to reach the maximum in 2003.

Retirement Earnings Test Exempt Amounts Increase for 2013

For workers under full retirement age who are receiving Social Security benefits, $1 in benefits is withheld for every $2 above the Retirement Earnings Test Exempt Amount of $14,640 per year or $1,220 per month in 2012. This will increase to $15,120 per year or $1,260 per month for 2013. The year an individual reaches full retirement age, $1 in benefits is withheld for every $3 above the Retirement Earnings Test Exempt Amount of $38,880 per year or $3,240 per month in 2012. This will increase to $40,080 per year or $3,340 per month for 2013. The month an individual reaches full retirement age there is no limit on earnings.

Quarter of Coverage Amounts Increases to $1,160

Also increasing for 2013 is that amount needed to earn a Social Security credit, formerly known as a quarter of coverage. In 2012, a credit is earned for every $1,130 of earnings, up to a maximum of four credits. That amount will increase to $1,160 for 2013.

Social Security Monthly Benefits to Increase in January 2013

The maximum benefit for a worker retiring at full retirement age is also increasing from $2,513 to $2,533. See the table below for other changes in Social Security benefits for 2012.

2013 Social Security Benefits

20122013
Maximum Benefit:
Worker Retiring at Full Retirement Age$2,513 per month$2,533 per month
SSI Federal Payment Standard:
Individual$698 per month$710 per month
Couple$1,048 per month$1,066 per month
SSI Resources Limit:
Individual$2,000$2,000
Couple$3,000$3,000
SSI Student Exclusion:
Monthly Limit$1,700$1,730
Annual Limit$6,840$6,960

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on the Social Security changes for 2013 or get further information at Important Facts and Figures.

October 19, 2011

Tip of the Week: Social Security Administration Announces 2012 Increases

Filed under: News — Tags: , , , , , — Vision @ 10:23 am
Commissioner of Social Security, Michael J. Astrue
Commissioner of Social Security, Michael J. Astrue
The Social Security Administration announced today that the Maximum Taxable Earnings or Social Security Wage Base would increase from $106,800 in 2011 to $110,100 in 2012.

Social Security Increases Based on CPI Change

Since there was a 3.6% increase in the Consumer Price Index (CPI-W) from the third quarter of 2010 to the third quarter of 2011, the Social Security Wage Base will also increase by 3.6%. This is the first increase in the Social Security Wage base since 2009. Wages are scheduled to be taxed at 6.2%, so the maximum tax to be paid by each employee at that rate would be $6,826.20. There are proposals to keep the current rate of 4.2% for employees or to reduce it to 3.1%, but none has passed at this time. About 7% of workers who pay Social Security Tax are expected to reach the maximum in 2012.

Retirement Earnings Test Exempt Amounts Increase for 2012

For workers under full retirement age who are receiving Social Security benefits, $1 in benefits is withheld for every $2 above the Retirement Earnings Test Exempt Amount of $14,160 per year or $1,180 per month in 2011. This will increase to $14,640 per year or $1,220 per month for 2012. The year an individual reaches full retirement age, $1 in benefits is withheld for every $3 above the Retirement Earnings Test Exempt Amount of $37,680 per year or $3,140 per month in 2011. This will increase to $38,880 per year or $3,240 per month for 2012. The month an individual reaches full retirement age there is no limit on earnings.

Quarter of Coverage Amounts Increases to $1,130

Also increasing for 2012 is that amount needed to earn a Social Security credit, formerly known as a quarter of coverage. In 2011, a credit is earned for every $1,120 of earnings, up to a maximum of four credits. That amount will increase to $1,130 for 2012.

Social Security Monthly Benefits to Increase in January 2012

The maximum benefit for a worker retiring at full retirement age is also increasing from $2,366 to $2,513. See the table below for other changes in Social Security benefits for 2012.

2012 Social Security Benefits

20112012
Maximum Benefit:
Worker Retiring at Full Retirement Age$2,366 per month$2,513 per month
SSI Federal Payment Standard:
Individual$674 per month$698 per month
Couple$1,011 per month$1,048 per month
SSI Resources Limit:
Individual$2,000$2,000
Couple$3,000$3,000
SSI Student Exclusion:
Monthly Limit$1,640$1,700
Annual Limit$6,600$6,840

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on the Social Security changes for 2012 or get further information at Important Facts and Figures.

January 18, 2011

2010 Form W-2 Tips, Part 12, Box 11 Nonqualified Plans

This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 11, nonqualified plans.

Box 11 Shows Distributions from Nonqualified Plans

Box 11 shows the amount of distributions from a nonqualified plan or a nongovernmental §457(b) plan. These distributions should also be reported in box 1. Distributions from governmental §457(b) plans are not reported in this box.

Box 11 May Show Earnings and Deferrals That Became Taxable

Box 11 should show deferrals and earnings that became taxable for social security and Medicare purposes in 2010 because the deferrals and earnings were no longer subject to a substantial risk of forfeiture, but only if the amounts were for services before 2010 and no distributions were made in 2010. These amounts must also be reported in box 3, up to the $106,800 wage limit, and box 5.

Box 11 Not to Be Used for Deferrals Included in Box 3 and/or Box 5

Box 11 should not be used for deferrals that are included in box 3, up to the wage limit, and box 5 and that are for services performed in 2010.

Use Form SSA-131 to Report When Payments and Deferrals Are Made in the Same Year

Box 11 should also not be used when payments are made from a nonqualified plan and deferrals are included in box 3, up to the wage limit, and box 5. Employers should use Form SSA-131, Employer Report of Special Wage Payments, but only if the employee was age 62 or older by the end of 2010. Generally the employer should report the amount from box 1 of Form W-2, plus any amounts deferred during 2010, less any payments from the nonqualified plan.

Amounts for Form W-2
Wages$50,000
Distributions from nonqualified plan75,000
Sub-total125,000
Less amount deferred35,000
Form W-2, box 1 amount$90,000
  
Wages$50,000
Form W-2, box 3 amount$50,000
  
Wages$50,000
Form W-2, box 5 amount$50,000

Assume Jessica retired during 2010. She earned $50,000 in wages, but deferred $35,000 of that amount in a nonqualified deferred compensation plan. Since she retired, she also received $75,000 in payments from the plan. Since there are both distributions and deferrals in 2010, no amount is reported in box 11. Box 11 should also not be used to report special wage payments earned in a prior year such as accrued sick pay or vacation pay. These amounts should be reported on Form SSA-131, however, so that the Social Security Administration may accurately calculate the recipient’s social security benefits.

Amounts for Form SSA-131
Form W-2, box 1 amount$  90,000
Plus 2009 deferral    35,000
Sub-total   125,000
Less distributions from nonqualified plan    75,000
Form SSA-131, item 6 amount$  50,000

Box 12, Codes Is the Next Topic

The next topic in this continuing series will be Box 12, codes. Contact Vision Payroll with any questions on the 2010 Form W-2.

January 11, 2011

2010 Form W-2 Tips, Part 8, Box 7 Social Security Tips

This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 7, social security tips.

Boxes 3 and 7 Combined Cannot Exceed $106,800

Box 7 shows the amount of tips reported by employees. In many situations, the cash wages paid are insufficient to collect the entire amount of social security and Medicare tax. Reported tips must still be shown in this box, even if social security or Medicare tax was not withheld on them. For 2010, the combined total of Boxes 3 and 7 cannot exceed $106,800. The reported tips should be included with amounts reported in Box 1, wages, tips, other compensation and Box 5, Medicare wages and tips. Since social security benefits are based on the amount of social security tips reported to the Social Security Administration (SSA), it is important that employees periodically review their social security earnings record and provide the SSA with the Form W-2 to update any incorrectly posted earnings records.

Box 8, Allocated Tips Is the Next Topic

The next topic in this continuing series will be Box 8, allocated tips. Contact Vision Payroll with any questions on the 2010 Form W-2.

January 4, 2011

2010 Form W-2 Tips, Part 5, Box 4 Social Security Tax Withheld

Filed under: News — Tags: , , , , — Vision @ 10:00 am

This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 4, social security tax withheld.

Maximum Withholding for 2010 Was $6,621.60

Box 4 shows the total amount of employee social security tax withheld, including the amount withheld on tips. It does not include any employer contribution toward social security on the employee’s behalf. Since the 2010 rate was 6.2% and the taxable wage base was $106,800, the amount in this box should not exceed $6,621.60. If the employer paid the employee’s share of such taxes rather than withholding them, the tax must be grossed up and included in boxes 1, 3, and 5.

Box 5, Medicare Wages and Tips Is the Next Topic

The next topic in this continuing series will be Box 5, Medicare wages and tips. Contact Vision Payroll with any questions on the 2010 Form W-2.

January 2, 2011

2010 Form W-2 Tips, Part 4, Box 3 Social Security Wages

This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review Box 3, social security wages.

Social Security Earnings Help Determine the Amount of Social Security Benefits

Box 3 shows the amount wages paid subject to social security tax. It does not include social security tips reported in box 7 or allocated tips reported in box 8. Wages should be reduced by amounts withheld for non-taxable benefits elected under §125 plans, certain clergy housing allowances, and third-party sick pay after the end of six calendar months after the calendar month that the employee last worked for the employer. For 2010, the combined total of boxes 3 and 7 cannot exceed $106,800. Since social security benefits are based on the amount of social security wages reported to the Social Security Administration (SSA), it is important that employees periodically review their social security earnings record and provide the SSA with the Form W-2 to update any incorrectly posted earnings records.

Box 4, Social Security Tax Withheld Is the Next Topic

The next topic in this continuing series will be Box 4, social security tax withheld. Contact Vision Payroll with any questions on the 2010 Form W-2.

December 26, 2010

2010 Form W-2 Tips, Part 1, General Information

2010 Form W-2 Tips, Part 1, General Information
2010 Form W-2 Tips, Part 1, General Information
This is one in a continuing series on the 2010 Form W-2, Wage and Tax Statement, which employers must generally furnish to employees no later than January 31, 2011. Forms mailed on the due date are considered furnished if properly addressed. Employers unable to meet that deadline may file a request for extension of time to furnish the forms. Today we review general information regarding Form W-2.

Form W-2 Should Be Typed or Machine-Printed

Forms W-2 should be typed or machine-printed in black ink, using 12-point Courier font. Dollar signs and commas must be omitted, but decimal points and cents, even if zero, must be included. Forms W-2 must be prepared on a calendar year basis using pay dates, not work dates. Wages for work performed in 2009 and paid in 2010 are included and wages for work performed in 2010 and paid in 2011 are excluded.

Boxes a-f Contain Employee and Employer Identifying Information

Report the employee’s social security number (SSN) in box a. Employees who have applied for, but not received, an SSN should be reported with all zeroes and corrected on a Form W-2c. Enter in box b the employer’s employer identification number, not the owner’s SSN. Box c must contain the employer’s address as shown on Forms 941, 943, 944, CT-1 or Schedule H of Form 1040. Box d is an optional box for employer use to identify individual forms. Box e should report the employee’s name exactly as shown on the social security card. Suffixes such as Sr. or Jr. should only be included if on the social security card. Do not include professional and academic titles and degrees such as CPA or Ph.D. as part of the employee’s names. Names should not be changed on Form W-2 unless the employee has received a revised card from the Social Security Administration. The Address in box f should be the address where the employee receives mail. It is recommended that comma and periods not be used in delivery addresses. Foreign country names are not to be abbreviated.

Box 1, Wages, Tips, Other Compensation Is the Next Topic

The next topic in this continuing series will be Box 1, wages, tips, other compensation. Contact Vision Payroll with any questions on 2010 Form W-2.

October 16, 2010

Social Security Administration Announces 2011 Changes

Filed under: News — Tags: , , , , — Vision @ 3:51 pm
Commissioner of Social Security, Michael J. Astrue
Commissioner of Social Security, Michael J. Astrue
The Social Security Administration announced recently that the Maximum Taxable Earnings or Social Security Wage Base would not change for 2011.

Social Security Increases Based on CPI Change

Since there was no increase in the Consumer Price Index (CPI-W) from the third quarter of 2008 to the third quarter of 2010, the Social Security Wage Base will remain at $106,800. There is no provision for a Cost-of-Living Adjustment (COLA) when there is no increase in the CPI-W. Wages are taxed at 6.2%, so the maximum tax to be paid by each employee will be $6,621.60. About 7% of workers who pay Social Security Tax are expected to reach the maximum in 2010.

Retirement Earnings Test Exempt Amounts Remain Unchanged for 2011

For workers under full retirement age, $1 in benefits will be withheld for every $2 above the Retirement Earnings Test Exempt Amount of $14,160 per year or $1,180 per month. The year an individual reaches full retirement age, $1 in benefits will be withheld for every $3 above the Retirement Earnings Test Exempt Amount of $37,680 per year or $3,140 per month. The month an individual reaches full retirement age there is no limit on earnings. These amounts are also unchanged from 2010 to 2011.

Quarter of Coverage Amounts Stay at $1,120

Also unchanged for 2011 is that amount needed to earn a Social Security credit, formerly known as a quarter of coverage. In 2011, a credit will be earned for every $1,120 of earnings, up to a maximum of four credits.

Contact Vision Payroll if you have any questions on the Social Security changes for 2011 or get further information at Important Facts and Figures.

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