What is FICA?





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** What is FICA? **

*If you're a wage or salaried employee, your employer picks up half of this
tax burden.*

In Lesson 18
Glossary take the test
the test

· Top things to know

· Tax basics

· So what's your tax bracket?

· What's FICA again?

· Who needs to pay estimated taxes

· 1040 mysteries revealed

· The ABCs of the AMT

· The dreaded audit

· The best time for tax planning

· Tax law changes

Money 101 Lessons
Setting priorities

Making a budget

Basics of banking and saving

Basics of investing

Investing in stocks

Investing in mutual funds

Investing in bonds

Buying a home

Controlling debt

Employee stock options

Saving for college

Kids and money

Planning for retirement

Asset allocation

Hiring financial help

Health insurance

Buying a car


Home insurance

Life insurance

Estate planning

Auto insurance


Under the Federal Insurance Contributions Act (FICA) 12.4% of earned income
up to an annual limit must be paid into Social Security, and an additional
2.9% must be paid into Medicare.

That limit is $113,700 for 2013.

There are no earned income limits on Medicare taxes -- so even if your
salary is well above the cap for Social Security tax, you will still owe
Medicare tax on your total earned income.

If you're a wage or salaried employee, you pay only half the FICA bill (In
2013, 6.2% for Social Security plus 1.45% for Medicare), and the tax is
automatically withheld.

Your employer contributes the rest

Source: money.cnn.com/magazines/moneymag/money101/lesson18/index4.htm

what is fica

Federal Insurance Contributions Act tax - Wikipedia, the free encyclopedia


** Federal Insurance Contributions Act tax **

From Wikipedia, the free encyclopedia
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"FICA" redirects here. For other uses, see FICA (disambiguation).

Taxation in the United States
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*Federal Insurance Contributions Act (FICA) tax* /ˈfaɪkə/ is a
United States Federal payroll (or employment) tax^[1] imposed on both
employees and employers to fund Social Security and Medicare^[2]
—federal programs that provide benefits for retirees, the disabled,
and children of deceased workers. Social Security benefits include old-age,
survivors, and disability insurance (OASDI); Medicare provides hospital
insurance benefits for the elderly. The amount that one pays in payroll
taxes throughout one's working career is associated indirectly with the
social security benefits annuity that one receives as a retiree.^[/citation
needed/] This has caused some

Source: en.wikipedia.org/wiki/Federal_Insurance_Contributions_Act_tax

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