These come from the aforementioned HR/Payroll newsletter from my company.
* The tax rate for social security remains at 6.2%. The 2006 wage base limit rises to $94,200 and $5,840.40 as the maximum deduction for the year.
* The tax rate for Medicare is unchanged at 1.45% with no wage base limit.
* Jan 1, 2006, the limit on elective deferrals will increase to $15,000, and an additional 5,000 for Age 50 401k catch-up.
* The annual wage limit for 401k contribution is $220,000
Most of us hard working bloggers don’t make $220K. In fact, I’d wager a good chunk of us can contribute 20% of our income and still not max out to $15K annually.
I’ve never realized that after a certain rate you don’t have to pay for social security anymore. It’s highly unlikely I’m going to make $90K anytime soon anyhow so I guess I can put that figure out of my head.
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