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Update 10/22/2014: The wage base has been set for 2015. See the article Social Security Wage Base Set for 2015.
According to the Social Security Administration trustees, the Social Security wage base for 2015 is projected to be $119,100. This represents an increase of $2,100 from the 2014 wage base of $117,000.
This is an increase of 1.79% – and won’t be finalized until October when the other increases for Social Security amounts are announced. This is a relatively small increase when compared to recent annual increases we’ve seen. The previous 3 years’ increases have averaged 3.09%.
This is different from the COLA (Cost of Living Adjustment), which has increased an average of 2.27% in the past three years. The 2014 COLA (applicable to 2015 benefits and other figures) will be released later in the year, typically in October.
Sterling Raskie, MSFS, CFP®, ChFC®
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And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.
Actually, the base wage for 2015 has been set and it is $118,500, not the $119,100 you have listed.
Yes, thank you. As of this morning we have this information, and I will update the message appropriately.
jb
What if an individual has two jobs combined that exceed the $117,000 threshold? Is there a way to mitigate paying more than your fair share?
You have two choices – if one employer’s pay to you is enough or more than the threshold, instruct the other employer to not withhold SS tax. If that’s not the case and you have more than the 6.2% of $117,000 ($7,254) withheld in SS tax, you would enter the excess withheld on line 69 of your Form 1040. Be careful about this though: you want to check each employer’s withholding to make sure they’re not overwithholding (taking more than 6.2% by error) before you claim it as excess. If the excess is withheld in error, your employer is supposed to correct this on future paychecks, rather than you reporting it as excess withholding.
Your 1st choice is not correct. If you work multiple jobs or would even changes jobs mid-year and an employee would collectively reach the $117,000 threshold, all of these employers involved are required to withhold SS until the employee would max out respectively for each employer. The reason being is that the employer is required to match the SS withholding. Any amount over withheld for the employee is then applied as a credit on line 69 of their personal tax return, but they still have to have it withheld from their check in order to receive the total benefit from each employer.
Example: EE earns $117,000 with each employer for a total gross of $234,000. If the employee only has SS withheld from one employer, then the total employer matching SS benefit for that year would only be $7254 where they should receive $7254 from each employer for a total of $$14508.
Thanks for the insight, Amy. That’s interesting, and not what I had understood (obviously) to be the case. I appreciate your clarification.
jb