Social Security Taxes

Answers to some frequently asked questions about Social Security taxes:

The Social Security Act was originally signed into law back in 1935 by President Franklin D. Roosevelt. The Social Security program provides US workers and eligible members of their families with benefits when they retire; the program can also provide benefits if workers become disabled and also when they die. The program was updated in 1983.

You pay 7.65 % of your salary to taxes for social security taxes and Medicare taxes. The social security tax is 6.2 % up to $106,800 and the Medicare tax rate is 1.45 % (2010). Your employer also pays 7.65% of your salary so essentially you and your employer are splitting the cost of social security taxes.

If you are self-employed then you bear the full burden of paying social security and medicare taxes, or 15.3% of your net earnings.

If you find that you owe back taxes, you will want to recover and organize any previous records that may help you establish the tax calculations for the period in question. This includes previously filed tax returns for previous tax years, quarterly tax payment receipts, W-2's, expense receipts, and any relevant tax calculation worksheets.

Note that tax rates are subject to change over time. Tax rates used here are for example purposes only and should not be relied upon.

Links and resources to additional information are available directly from the Social Security Administration.