Pay Checks: Who Is FICA And Why Is He Getting All My Money?

Where Does It All Go? While for the first I guess both of them would be correct?

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All wages, salaries, bonuses, commissions, tips, or incentive packages provided by employers are taxable. Some states and cities require additional deductions for state and city income taxes. Other deductions such as contributions to retirement accounts or savings plans, however, are voluntary. Who or what is FICA? Social Security is currently 6. Social Security taxes fund retirement benefits, benefits for the dependents of retired workers, and benefits for the disabled and their dependents.

The funds received for Medicare are used to provide medical benefits for certain individuals when they reach age Workers, retired workers, and the spouses of workers and retired workers are eligible to receive Medicare benefits upon reaching age The largest amount withheld from your paycheck will be your federal income tax.

Each year, you owe the federal government a certain amount based on your gross income. The government has found a way to make paying these taxes a little less painful — it withholds them, along with other required deductions, from your paycheck each pay period. These withheld dollars act as a pre-payment on the tax bill you owe the government.

When you start a new job, you get to decide how much money is withheld from your pay check by completing a W-4 form. The W-4 form asks you to indicate the number of personal allowances you wish to take.

These allowances reduce the amount of income that the government views as taxable. It pays to figure out the right number of allowances; otherwise, you may end up owing Uncle Sam a good chunk of change come tax time.

Search this Question Share. Feb 7, , Businesses are required to withhold FICA and medicare taxes from their employees' income. They match that amount when they pay it to the feds. On Schedule C, they will calculate both amounts I don't think it's quite twice as much and you pay it then. You have to include this in your quarterly estimated tax payments. We'd like to understand what you find wrong with rwinterton's answer: What's inaccurate about this answer?

Please focus on the content not the person! Link to a credible and well-known source. You can provide a URL or simply describe the source. This income is subject to SE tax at You will pay estimated taxes if required. We'd like to understand what you find wrong with MukatA's answer: Find latest posts by MukatA. Ask your question View similar questions. Fica taxes [ 1 Answers ] I own a small business and have not paid fica taxes for myself.

FICA taxes after 5 yrs on F1? Fica taxes [ 1 Answers ] As a 73 yr. Answer Find questions to answer. Find latest posts by BigMarkFan.