Today, Social Security and Medicare taxes are paid to entitle workers to receive retirement benefits and health coverage after a certain age. Additional Medicare taxes raise money to pay for the Patient Protection and Affordable Care Act (P.L. 112-148). These taxes apply in 2014; some rules have changed from 2013 while others have not. Overall, these taxes combine to raise the tax burden for everyone who works, but especially for high-income taxpayers who work and/or have investment income.
Overview
The Social Security Administration announced cost-of-living changes for 2014 (SSA Fact Sheet, Oct. 31, 2013; (http://ssa.gov/pressoffice/factsheets/colafacts2014.html). These changes affect individuals who are working, businesses and retirees. The wage base for workers and employers, as well as self-employed individuals, paying into the Social Security system has been increased by a mere 1.5 percent. Last year, the increase was 1.7 percent and in 2012 it was 3.6 percent.
