By Elliot Raphaelson
From Tribune Content Agency
In a recent column in Investment News, Mary Beth Franklin discussed issues related to payroll taxes and to lost potential Social Security benefits for those who apply prior to full retirement age.
Franklin has written an excellent ebook covering all Social Security issues, which you can order at www.maximizingsocialsecuritybenefits.com. Below are some typical questions I receive from readers and answers based on the topics Franklin discussed in her recent column.
Question: Do FICA taxes end when I reach full retirement age (FRA)?
Answer: No. In 2022, if you are an employee, 7.65 percent of the first $147,000 of your gross earnings is taxable regardless of whether you reached your FRA or not. What does that 7.65 percent fund? Think of it as two taxes: first, a tax of 6.2 percent funds Social Security benefits; then, a tax of 1.45 percent funds Medicare. Note that the Medicare tax is not limited; it applies to earnings in excess of $147,000….