No one likes talking about taxes. But unfortunately they are a necessary part of our lives.There are ALL KINDS of taxes out there. And one of them that we all have to pay if we have a job is the FICA tax.
What is the FICA tax?
FICA is an acronym that stands for “ Federal Insurance Contribution Act”.
It is a tax that is deducted from each paycheck that we all receive.
The money that is your FICA tax is used for several different needs including Social Security and Medicare programs.
The FICA tax is split into two parts:
- The Social Security Tax
- Medicare tax
The Social Security tax is 6.2% of your gross wages.
And the Medicare tax is 1.45% of your gross wages.
Together they add up to be 7.65% of your overall gross wages regardless of which tax bracket you are in.
The FICA tax is in addition to federal income tax, state income tax (if applicable), and local income taxes (if applicable).
The full amount that is paid in FICA taxes is actually 15.3%. But your employer will pay ½ of it and you will pay the other ½.
7.65% for you and 7.65% for your employer.
Final Thoughts
Like I have said many times, taxes are often unavoidable. Especially the FICA taxes. As long as you have an earned income you will have to pay them. It is important that you at least know what percentage of your paycheck you will have to pay.
You can do this!
I am here for you!
Until next time!
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