Norm Haug RSSA Staff
Social Security just raised your 2023 Taxes by $818!
That’s right! And nobody told you until now.
If you earn more than $160,200, you will pay $818 more in payroll taxes in 2023. Additionally, your employer will also pay $818 more in payroll taxes in 2023. This is the largest dollar increase ever by $4,500! It’s also the highest percentage increase in 40 years!
How did this happen? How is it that the US Government thinks it’s a good idea to increase taxes when inflation is over 8%? It’s a double hit to Americans who have to pay higher prices and now higher taxes.
This all stems from the Social Security Administration needing to keep the Social Security Maximum Taxable Limit up with inflation and it flies under the radar as the media covers the big news of the Social Security Administration announcement that benefits will increase by 8.7% beginning with payments in January of 2023.
The increase for approximately 70 million Americans is based on a Cost of Living Adjustment (COLA) that is calculated by law and is based on the third quarter annual increase of the CPI-W report. Someone needs to pay for that increase.
As a result, 9 million wage earners and their employers, big and small, will need to pick-up the tab. And unfortunately those additional payroll taxes don’t come close to offsetting the cost of the COLA. This puts the trust funds at even greater risk and potentially moves up the date at which time they no longer can cover the deficit.
What can you do about this? As you plan for retirement, get a Social Security benefit analysis to ensure you’re getting every dollar you’re entitled to. Also, business owners over age 55 might want to consider a Self-Employed Tax and Retirement Analysis (SETARA) to determine changes that may uncover adjustments to create the optimal mix of income, payroll tax and future benefits.
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