Wednesday, November 29, 2017
SOME NEWS AND A REMINDER
(1) The Social Security Administration announced on Monday that it has revised the 2018 taxable wage base –
“The new amount for 2018, based on updated wage data reported to Social Security, is $128,400.”
In a press release the SSA explained -
“Based on the wage data Social Security had at the time of the October 13, 2017, announcement, the maximum amount of earnings subject to the Social Security tax (taxable maximum) was to increase to $128,700 in 2018, from $127,200 in 2017.”
“This lower taxable maximum amount is due to corrected W2s provided to Social Security in late October 2017 by a national payroll service provider. Approximately 500,000 corrections for W2s from 2016 resulted in changes for three items based on the national average wage: the 2018 taxable maximum, primary insurance amount bend points--figures used in the computation of Social Security benefits--and family maximum bend points. No other items based on national average wages were affected.
The change to the taxable maximum does not take effect until January 2018, and the updated bend points in the benefit computation only apply to people who initially become eligible for Social Security benefits in calendar year 2018. This does not affect current beneficiaries.”
As a result of this revision, the maximum withholding for Social Security tax in 2018 is now $7,960.80. And for 2018 the self-employment tax imposed on self-employed people is 12.4% Social Security tax on the first $128,400 of self-employment income, for a maximum of $15,921.60, plus 2.9% Medicare tax on the all self-employment income.
(2) I recently received the following email reminder from the New Jersey Division of Taxation.
“Starting January 1, 2018, the Sales and Use Tax rate will decrease from 6.875 to 6.625%.
Please prepare to update your records accordingly. The new tax rates will be:
* Atlantic City Luxury Tax-
12.625% (9% Atlantic City Luxury Tax and 3.625% New Jersey Sales and Use Tax for sales subject to both taxes ‒ other than alcoholic beverages by the drink);
9.625% (3% Atlantic City Luxury Tax and 6.625% New Jersey Sales and Use Tax for alcoholic beverages that are sold by the drink in Atlantic City);
* Boat and Other Vessels Sales Tax ‒ 3.3125% (50% reduced rate);
* Cape May County Tourism Tax ‒ 8.625% (6.625% New Jersey Sales and Use Tax and 2% Tourism Tax for Wildwood, Wildwood Crest, and North Wildwood). This rate is in addition to the 1.85% Tourism Assessment and the 3.15% State Occupancy Fee on hotel occupancies;
* New Jersey Sales and Use Tax ‒ 6.625%;
* Salem County Sales Tax ‒ 3.3125% (50% reduced rate);
* Urban Enterprise Zone Sales Tax ‒ 3.3125% (50% reduced rate).
If you have any questions:
* Visit here for more information about New Jersey Sales and Use Tax or
* Call the Division of Taxation's Customer Service Center at 609-292-6400. We're available Monday, 8:30 a.m. to 5:30 p.m. and Tuesday through Friday, 8:30 a.m. to 4:30 p.m., except State holidays.”