You might be confused about whether your Social Security money is taxable or not. Here’s a definitive guide for you to follow!
As the filing deadline for the tax season of 2023 approaches, a large number of Americans have already completed their obligations to the IRS.
While others wait in the hopes of uncovering additional deductions they can take advantage of, others are actively searching for further tax breaks.
Who Will Not Pay For Social Security Taxes?
Almost every taxpayer in the United States is required to pay Social Security taxes on their job or self-employment income, but the IRS offers savings to those who qualify, providing them a sizable tax relief but excluding them from receiving Social Security benefits.
Nonresident Aliens
Noncitizens and illegal residents of the United States are termed nonresident aliens, with those who work in the country often paying Social Security tax on their earnings.
Foreign government employees living in the United States are free from paying Social Security taxes on their salaries, as are their family members and domestic workers.
The sort of visa a non-resident foreigner holds will decide whether or not he or she is eligible for this tax exemption.
Religious Members
Members of a recognized religious sect who oppose taking benefits such as disability payments, retirement payments, or event payments are eligible for the tax exemption.
The religious group must have been registered by 1950 and provided its members with a fair quality of living.
Students
Students having part-time employment at the same school where they are enrolled are eligible for this tax exemption, which applies exclusively to income from that job and not from other employers.
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Maximum Taxable Amount
In October, the Social Security Administration (SSA) stated that this year’s maximum taxable wages will increase from $147,000 to $160,200.
The wage base limit is $160,200, according to the official IRS website. The Medicare tax rate for employees and employers is 1.45%, unchanged from 2022. There is no cap on the wage base for the Medicare tax.
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