Social Security Tax

What is a 'Social Security Tax'

A Social Security tax is the tax levied on both employers and employees used to fund the Social Security program. Social Security tax is usually collected in the form of payroll tax or self-employment tax. The Social Security tax pays for the retirement and disability benefits received by millions of Americans each year.

BREAKING DOWN 'Social Security Tax'

The funds collected from employees for Social Security are not put into a trust for the individual employee currently paying into the system, but rather are used to pay existing retirees. Also, Social Security tax can refer to the tax on the benefits received from Social Security. In the past, Social Security was tax free, but today if you have other substantial income along with your benefits, you will likely end up paying some tax on them.

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RELATED FAQS
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    Learn how the Social Security tax cap works, what percentage of income is deducted for Social Security taxes and the history ... Read Answer >>
  2. Are Social Security benefits taxable after age 62?

    Learn under what circumstances Social Security benefits may be taxed for seniors age 62 and over, and find out which states ... Read Answer >>
  3. Must I pay Social Security taxes on my earnings after full retirement age?

    Paying Social Security contributions continues even past reaching full retirement age, but that can increase future Social ... Read Answer >>
  4. Is it possible for a 79 year old married person to legally stop paying taxes on social ...

    I am 79 years old and my wife is 78 years old (working part time). I am drawing two Social Security checks, a small retirement, ... Read Answer >>
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