Welcome back to Ned’s blog spot, where you can find all the answers to your tax questions. In today’s blog topic, we will be discussing social security and how it will be changing in the year 2023.
In the year 2023, there will be an increase in the cost-of-living-adjustment (COLA), payable to over 65 million social security beneficiaries. The increase will be 8.7%, equating to more than $140 per month starting in January 2023. Beneficiaries turning 66 years of age next year, will not lose any benefits if they earn $56,520 or less before reaching 66. Individuals who are 62-65 years of age by the end of next year, will make up to $21,240 before losing any benefits. Additionally, once a beneficiary turns 66, there will be no earnings cap.
With an increase in COLA, there will also be an increase in the maximum amount of earnings subject to social security tax. The new maximum amount will be $160,200, a $13,200 hike from years past. Employers and employees will continue to pay 1.45% Medicare tax on all compensation, with no cap. Employees also pay a 0.9% Medicare surtax on wages and self-employment income over $200,000 for singles and $250,000 for couples. The surtax does not apply to employers.
The Acting Social Security Commissioner, Kilola Kijakazi, has released the following statement regarding the above changes (there is a link below to watch the full press release)
“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room. This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned,”
We hope you find this information helpful as you begin to prepare for the upcoming tax season. And as always, the information for our main office downtown will be listed as well. Don’t forget to check back for more!
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255 N Liberty Street
Jacksonville, FL 32202