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Social Security Wage Base Rises to $117,000 for 2014

The social security wage base which taxes for old age, survivors, and disability insurance (OASDI) will increase from $113,700 to $117,000 in 2014. The new rate means employees will pay a maximum of $7,254 of OASDI in 2014, with employers paying an equal amount.

The Medicare hospital insurance (HI) portion of the tax, which is also paid by employers and employees, has no wage limit. It applies to all wages at a rate of 1.45%—unchanged from 2013. The new additional Medicare tax of 0.9% also applies to wages in excess of $200,000 for single taxpayers and $250,000 for married taxpayers filing jointly, but there is no employer portion for this tax, although employers must withhold the employee portion.