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Social Security changes noted for 1993.

The good news is that the combined Social Security and Medicare tax rate will not go up in 1993. The bad news is that the Social Security wage base--the maximum amount of earnings taxed for Social Security--will go up to $57,600 from the 1992 level of $55,500. The Medicare wage base will also increase for 1993 to $135,000 from the 1992 base of $130,200. The 1.45% that employees pay for Medicare Hospital Insurance will apply to earnings up to $135,000. For self-employed persons, the tax remains at 2.9% for all earnings up to the 1993 Medicare wage base of $135,000.

The amount of wages an employee needs to earn in one Social Security quarter of "credit" in 1993 will increase by $70 to $590. The maximum number of credits that can be earned each year is four. Thus, an employee earning more than $2,360 in 1993 will receive the maximum of four credits for the year.

The maximum amount of money that beneficiaries between the ages of 65 and 69 can earn in 1993 without reducing the amount of their Social Security benefits is $10,560. This is an increase of $360 over the 1992 limit. For every three dollars a beneficiary earns over the $10,560 limit, one dollar is withdrawn from the Social Security benefit. For beneficiaries under age 65, the limit or earnings in 1993 will be $6,680. For every two dollars a beneficiary under 65 earns over that limit, one dollar is withheld from benefits. After the month a beneficiary turns 70, full retirement benefits are payable regardless of the amount earned.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Client Report
Publication:The National Public Accountant
Date:Feb 1, 1993
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