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The Social Security wage base increases this year to $117,000, up $3,300 from the cap for 2013. The tax rate imposed on employers and employees remains 6.2%, and the employers share of Medicare tax stays at 1.45%, but the 0.9% Medicare surtax kicks in for singles with wages exceeding $200,000 and couples earning over $250,000. The surtax doesn’t affect the employers share. Self-employeds are also subject to surtax.
Social Security benefits rise just 1.5% in 2014, due to low inflation. The earnings limits are heading up, too. People who turn 66 this year do not lose any benefits if they make $41,400 or less once they reach that age. Individuals between ages 62 and 66 by the end of 2014 can make up to $15,480 before they lose any benefits.
There’s no earnings cap once the beneficiary turns 66. The amount needed to qualify for coverage climbs to $1,200 a quarter. So earning $4,800 anytime during 2014 will net the full four quarters of coverage. And the threshold for the nanny tax rises to $1,900, a $100 boost.