As a followup to this morning’s post on the future of Social Security, I wanted to update you guys on the Social Security cap for 2010.
As you may or may not be aware, Social Security taxes are capped such that you only have to pay this tax (denoted FICA-OASDI on your paycheck) on your earned income up to a certain threshold.
In 2008, the cap kicked in at $102,000 per individual. In 2009, the cap rose by $4,800 to $106,800. And now, in 2010, the cap remains unchanged at $106,800. Hurray for a stagnant economy, huh?
This means that you’ll have to pay Social Security taxes on your first $106,800 in earned income. Beyond that, your Social Security obligation will drop away, and you’ll only have to pay the Medicare portion of your FICA taxes.