Up until December 31, 2024, the most that can be taxed from Social Security is $168,600. The new taxable maximum for 2025 will go up a lot after that date. Because of this, some people with high incomes whose jobs pay into Social Security may have to pay more in taxes.
Remember that the taxable maximum is the highest amount of money that you can make in a year before you have to pay payroll taxes on it. This means that in 2025, earnings above this amount will not be taxed.
Which will be Social Security’s taxable maximum in 2025?
The new taxable maximum will be $176,100 as of January 1, 2025. This means that all workers will need to pay attention to this. If you make more than that, you will only have to pay taxes on the amount you make above $176,100.
For everyone who gets Social Security, the COLA increase will be about 2.5%. But the taxable maximum has grown by 4.45%, which is a lot more. People who make a lot of money will need to plan for this extra tax money they will have to pay in 2025.
The taxable maximum has changed over the last ten years as shown below:
2015: 118,500
2016: 118,500
2017: 127,200
2018: 128,400
2019: 132,900
2020: 137,700
2021: 142,800
2022: 147,000
2023: 160,200
2024: 168,600
2025: 176,100
What is the maximum amount of money workers can pay to Social Security?
Social Security will take up to $10,453 from your pay if you make $168,600 in 2024. You should remember that both employers and employees pay 6.2 percent of wages to SSA, up to a maximum of $168,600 in 2024.
People in the United States who make more than $176,100 a year will have to pay about $10,918. That means it will cost about $465 more each year starting in 2025. It could be a lot of money if you are on a tight budget even though you make a lot of money.
Please remember that Social Security payments are paid for by workers who pay taxes. In other words, people who are retired are getting the tax money that other workers pay.
Read Also :- Gold coin worth more than $18 million, collectors wish they have a specimen like this one
