Higher Payroll Taxes Due Next Year
October 25, 2000
Many workers will be hit with higher Social Security taxes in 2001 as the amount of earnings earnings subject to the tax rises to $80,400.
- That's up from $76,200 this year and only $51,300 as recently as 1990.
- The increase will affect about 10.9 million workers, according to the Social Security Administration.
- Someone earning $81,000 this year and again next year, for example, will pay an additional $260.40 next year, bringing his total to $4,984,80.
- That represents a 5.5 percent increase in taxable earnings from this year, and a 57 percent jump from 1990.
Employers must also pay their share. Self-employed workers have to pay both portions, which means they may owe as much as $520.80 more next year. However, they get to deduct a portion of the total on their federal income tax returns.
Source: Tax Report, Wall Street Journal, October 25, 2000.
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