Table H: Federal Information, Taxes, Income Ceilings, and Minimum Wage Standards SR 98-05, 01/98 (FAM-A)

FIT

(Federal Income Tax)

FICA

(Medicare Tax)

FICA

(Social Security Tax)

Minimum Wage

See IRS Circular E

1.45%

7.65%

$5.15/hour

1.  Self-employed individuals pay a FICA withholding amount of 15.3% (2.9% for Medicare and 12.4% for Social Security tax, ) but they deduct one-half of their FICA tax paid on their federal income taxes. This reduces their FICA contribution to 7.65%.

2.  The income ceiling subject to the full FICA withholding rate is $68,400.

3.  There is no upper limit to the amount of gross earned income from which Medicare may be withheld.

4.  The maximum amount an individual over age 65 may earn without affecting Social Security benefits is $14,500.

5.  The maximum amount an individual under age 65 may earn without affecting Social Security benefits is $9,120.