In 2021, seniors may earn as much as $18,960 a 12 months with out having their Social Safety advantages impacted. In 2022, that threshold has elevated to $19,560. Earnings past that time may lead to some Social Safety revenue being withheld.
The earnings-test limits look totally different for these reaching FRA in 2022. Final 12 months, seniors in that boat may earn as much as $50,520 with out impacting their advantages. This 12 months, that threshold is as much as $51,960.
3. Increased payroll taxes
Social Safety will get the majority of its income from payroll taxes. Increased earners do not essentially pay these taxes on all of their earnings since there is a wage cap that comes into play yearly.
In 2021, earnings above $142,800 weren’t taxed for Social Safety functions. This 12 months, the wage cap has gone as much as $147,000, leaving employees incomes that a lot cash, or extra, answerable for taxes on a further $4,200 in revenue.
To be clear, this alteration will not affect the common U.S. employee. However these incomes larger salaries are apt to be sad about forking over extra in payroll tax. This particularly applies to the self-employed, since they do not get to separate their Social Safety tax burden with their employers.