Social Security Recipients take Note! The Social Security Administration (SSA) has announced the cost-of-living adjustment (COLA) for 2018 will be 2%, the biggest increase since 2012. Congratulations on your raise!
Employees take Note! The SSA also announced the maximum amount of earnings on which you will have to pay Social Security taxes will increase to $128,700 from the current level of $127,200. You will continue to pay 6.2% in payroll taxes on wages up to the earnings cap, and all of your wages are subject to the Medicare payroll tax of 1.45%. Since 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9% in Medicare taxes.
Medicare Recipients take Note! Medicare Part B premiums for 2018 have not yet been announced, but are expected to remain stable at $134/month for most people. Those with higher incomes are subject to the Income-Related Monthly Adjustment Amount (IRMAA) premium surcharge. The definition of “higher income” has been lowered, so more Medicare recipients will be caught by IRMAA next year. Watch out! Medicare premiums for 2018 should be announced in November.
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