2013 Social Security Rates and Ceilings

1. The Social Security Administration announced that the wage base for computing the Social Security tax (OASDI) in 2013 increased to $113,700 from $110,100. The monthly Social Security and Supplemental Security Income (SSI) benefits increased 1.7%  in 2013 due to a cost-of-living adjustment (COLA).
2. The temporary decrease in the employee SS tax rate from 6.2% to 4.2% expired December 31, 2012.  The 2013 SS tax rate for employees is to 6.2%.  The employer SS rate remains at 6.2%.
3. There is no wage ceiling on the 1.45% employee or employer Medicare tax; however, for the portion of wages in excess of $250,000 earned by a married filing jointly, $125,000 for a married filing separately, and $200,000 for singles, there is a surtax of 0.9%
   1. For example, Joe, a married filing jointly, earns $300,000 in tax year 2013. Joe’s employer must withhold 1.45% Medicare tax on $250,000 of his wages and 2.35% (1.45% normal Medicare tax + 0.9% surtax) on the additional $50,000.

Employers will continue to pay 1.45% Medicare tax on employee wages, regardless of the amount paid.

2013 Standard Mileage Rates

Announced in Notice 2012-72, beginning on January 1, 2013, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

1. 56.5 cents per mile for business miles driven
2. 24 cents per mile driven for medical or moving purposes
3. 14 cents per mile driven in service of charitable organizations

Pension Plan Limitations

In IR-2012-77, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2013. Please see this link for the 2013 Inflation Adjustments.