Things to Know About 2021

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Things to know about 2021:

More of your earnings will be subject to Social Security taxation.

Taxpayers will pay 6.2% Social Security tax and a 1.45% tax for Medicare (known together as FICA) on the first $142,800 they own, up from $137,700. There is no FICA tax owed any earnings above $142,800. The increase is based on the national average wage index.

Your Earnings limit will be higher of you are working and drawing Social Security before Your Full Retirement Age.

“Those who are collecting Social Security prior to reaching their full retirement age and continue to work will have any income they earn over $18,960 taxed, an increase of $720 from 2020. One benefit dollar of ever $2 they earn above that limit will be withheld. In the year that beneficiaries reach their full retirement, however, the earnings limit goes up $50,520 and only $1 out of every $3 above that amount will be withheld.
Once beneficiaries reach their full retirement age, however, no earnings are withheld, so there is no penalty for working and taking benefits.”

Source: “BenefitsPro”


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