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  PO Box 2214 Oregon City OR 97045 503-656-0699
Social Security
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Tax News You Can Use
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The Social Security 2022 wage base is $147,000, meaning Social Security tax is assessed on all wages up to this amount. The Medicare tax is assessed on all wages earned. For 2022, FICA (Social Security) withholding rate is 6.2% of gross wages and 1.45% for Medicare. Employers pay 6.2% of gross wages and match the Medicare tax for each employee. Self-employed taxpayers are assessed the full 15.3% in 2022. Taxpayers with incomes above certain levels may be assessed an additional Medicare surcharge tax. If you continue to work while collecting Social Security, FICA and Medicare taxes still will be withheld from your earnings. In 2022, Social Security considers full retirement age to be 66 years and four months. The full retirement age is creeping up to age 67. See the chart below to determine the age when you will be eligible to collect 100% of your Social Security benefit. Social Security provides an annual statement explaining your eligibility and projected benefit amount. Generally, you will need 10 years of work (or 40 credits) to be eligible to receive your own retirement benefits. A credit is based on $1,510 of earnings. You can earn up to 4 credits per year. To receive your full retirement benefit, you must wait to collect your Social Security benefits until you have reached the full retirement age. Under most circumstances, the earliest you can apply for benefits is when you reach 62. Your benefit will be permanently reduced by 25-30% and will also impact your spouse if he or she collects the spousal benefit. By waiting beyond your full retirement age, your benefit amount will increase 6-8% every year up to the age of 70, when you must begin taking your Social Security benefit. Social Security recipients younger than the full retirement age can earn up to $19,560 in 2022 before a payback of benefits is incurred. For every $2 in earnings over that amount, benefits are reduced $1. Retirees reaching full retirement age in 2022 can earn up to $51,960 during 2022 prior to reaching full retirement age. One dollar in benefits will be paid back to Social Security for every $3 in earnings over the limit. When the full retirement age is reached, there is no limit on earnings. Up to 85% of your Social Security benefits could be subject to Federal Income Tax, depending on your total income. Oregon does not tax Social Security. You may want to check other state laws for their tax treatment. Social Security recipients can opt to have federal tax withheld from their monthly benefit checks. The form to use is a W4-V. You can find out more about your personal Social Security benefits by creating an account at the Social Security Administration's website. You will also be able to access important documents like your 1099-SSA to report on your taxes.
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