Social Security Max Increases to $90,000 For 2005

Each year, the government increases the maximum social security taxes that you can pay. According to the Social Security Administration, the maximum wage base for 2005 will be $90,000, an increase of $2,100 from the 2004 max of $87,900. How is that for a “tax cut?” At a rate of 6.2%, the total social security taxes that your employer will withhold from your salary increases from $5,449.80 in 2004 to $5,580.00 in 2005.

In addition, every employee has Medicare taxes withheld from their pay at a rate of 1.45%. There is no limit on your wages subject to this tax.