Social Security and Personal Income Taxes
The Social Security tax rate on wages and self-employment income will revert to its previous rate of 6.2% for employees and 12.4% for self-employed individuals beginning January 1, 2013. The Social Security tax rate for 2012 was 4.2% for employees and 10.4% for self-employed individuals.
All wages and self-employment income up to the Social Security wage base in effect for a given year are subject to the Social Security Tax. The Social Security wage base for 2013 is $113,700. The Social Security wage base for 2012 was $110,000.
Personal income tax rates have returned to their respective levels prior to the 2001 tax year. From 2001 through 2012, there were six (6) tax rates ranging from ten (10%) percent to a top rate of thirty-five (35%) percent. Beginning in 2013, there will be five (5) income tax rates ranging from fifteen (15%) percent to a top rate of 39.6%. The ten (10%) percent tax rate that was in effect from 2001 through 2012 has been eliminated. For 2013 and future years, the lowest income tax bracket is fifteen (15%) percent. The twenty-five (25%) percent income tax bracket that existed in 2012 will now be twenty-eight (28%) percent. The 2012 brackets of thirty-three (33%) percent and thirty-five (35%) percent will become thirty-six (36%) percent and 39.6% brackets, respectively.