Blog #high networth


Do you earn wages in excess of $400,000? If so, consider the following: Under current law, wages up to the taxable maximum ($142,800 in 2021) are subject to Social Security payroll tax. This tax is 12.4% total, typically split evenly by you and your employer. Under Biden's tax plan, the taxable maximum would remain in place; however, when wages exceed $400,000, they would again become subject to Social Security payroll tax. This creates a “donut hole” in the payroll tax scheme (wages between the taxable maximum and $400,000 would not be subject to Social Security payroll tax).

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