Uniswap Labs has unveiled a collection of new features designed to refine the trading journey for users of its decentralized exchange (dex). This collection encompasses the Uniswap browser extension, limit orders for precise trading strategies, and advanced data and insights for making well-informed choices. Uniswap Labs explained on Tuesday that the expansion aims to make […]
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The federal government sets a limit on how much of your income is subject to the Social Security tax. For 2024, the Social Security tax limit is $168,600 (up from $160,200 in 2023). The maximum amount of Social Security tax an employee will have withheld from their paycheck in 2024 will be $10,453.20 ($168,600 x 6.2%). This is up from $9,932.40 ($160,200 x 6.2%) in 2023.
According to the Social Security Administration (SSA), an average of 70.6 million people per month received Social Security benefits, on average, of $1,681 per month in 2022. Benefit recipients received a slightly larger amount of $1,848 in 2023 due to the cost-of-living adjustment. The estimated amount for 2024 is $1,907 per month.
These payments are funded by the Social Security tax, which is also known as the Old Age, Survivors, and Disability Insurance (OASDI).
The tax has two parts:
Payroll taxes are based on an employee’s gross wages, salaries, and tips. These taxes are typically withheld by an employer and forwarded to the government on the employee’s behalf. Currently, the Social Security tax rate is 6.2% for the employer and 6.2% for the employee.
Medicare taxes are split between the employer and the employee, with a total tax rate of 2.9% for the current tax year.
If you are self-employed, you pay Social Security taxes as part of the quarterly estimated taxes you submit to the Internal Revenue Service (IRS). In this case, as you are considered both the employee and the employer, you are responsible for paying the full 12.4%; however, the IRS allows self-employed individuals to deduct the employer portion of self-employment taxes from their taxable income.
The Social Security taxes you pay while you work are used to fund benefits for existing beneficiaries. Ideally, once you become eligible, current workers will pay into the program so that you can collect benefits. The longer you wait to retire, the more benefits you should receive.
Keep in mind that the Social Security program is facing long-term financing shortfalls that could affect future benefits. Increasing the annual Social Security wage cap is one way to limit the shortfall, but it would not completely solve the problem.
The COLA increase of 8.7% for 2023 was the largest rise in approximately 40 years.
The government bases the annual Social Security tax limits on changes in the National Wage Index (NAWI), which tends to increase every year. The changes are intended to keep Social Security benefits on track with current inflation.
Any income you earn beyond the wage cap amount is not subject to a 6.2% Social Security payroll tax. For example, an employee who earns $170,000 in 2023 will pay $9,932.40 in Social Security taxes ($160,200 x 6.2%). For 2024, they will pay $10,453.20 ($168,600 x 6.2%).
Keep in mind, however, that there is no wage base limit for Medicare tax. While the employee is only subject to Social Security tax on the first $160,200 in 2023 ($168,600 in 2024), they will have to pay 1.45% Medicare tax on the entire $170,000. Individuals who earn more than $200,000 are also subject to a 0.9% additional Medicare tax.
The combination of the increase in the Social Security tax limit and the additional Medicare tax for high-earners could result in lower take-home pay. Unfortunately, that means workers who earned over $200,000 in 2023 are at risk of owing more taxes in 2024.
Here is an example of how the Social Security limit works:
| Social Security Tax Limit Example | |||||
|---|---|---|---|---|---|
| 2023 Income | 2023 Wage Cap | 2023 Social Security Taxes | 2024 Income | 2024 Wage Cap | 2024 Social Security Taxes |
| $170,000 | $160,200 | $9,932.40 | $170,000 | $168,600 | $10,453.20 |
The Social Security tax rate rarely changes, as employees have been paying 6.2% since 1990; however, unlike the tax rate, the Social Security tax limit is adjusted annually.
The federal government increased the Social Security tax limit in eight out of the past 10 years. The largest increase was in 2023 when it was raised almost 9% from $147,000 in 2022 to $160,200 in 2023.
The COLA is an annual adjustment made to the Social Security benefit amount. It is measured by the Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Congress implemented annual COLA adjustments starting in 1975 when inflation rates were extremely high.
The COLA was 8.7% for 2023 and is 3.2% for 2024. This means that Social Security recipients will see an increase in their monthly Social Security payments in 2024. Individuals will receive an average of $1,907 in their SSA benefits, and couples will receive, on average, $3,033 in 2024, thanks to the COLA increase.
Workers who receive benefits before they reach full retirement age (FRA) are subject to the retirement earnings test. If your income exceeds certain thresholds, then Social Security will withhold benefits until you reach FRA. Like the Social Security tax limit, these thresholds typically increase annually with the national wage index.
There are two annual earnings test exemption amounts. The first applies to individuals younger than retirement age and the other applies to individuals who reach FRA during that year. For younger recipients, Social Security withholds $1 for every $2 in excess of their exempt amount. Individuals who reach retirement age will have $1 withheld for every $3 in excess of their exempt amount.
In 2023, the earnings test exemption amounts are:
In other words, an individual who earns $21,240 ($56,520) or less in 2023 may be eligible to receive full Social Security benefits.
In 2024, the earnings test exemption amounts will increase to:
If you work as an employee in the United States, your employer will deduct Social Security taxes as part of your payroll. If you are self-employed, you are responsible for remitting your own Social Security taxes. Under both situations, most workers are required to contribute Social Security taxes up to IRS limits.
Under limited circumstances, some individuals may claim a qualifying religious exemption or temporary student exemption. Foreign government employees and nonresident aliens may also not be required to pay Social Security taxes. Lastly, individuals who don’t make enough money may also not end up paying Social Security.
The Social Security portion is taxed at 6.2% on earnings up to the maximum taxable amount, while the Medicare portion is taxed at 1.45%. In total, the combined rate is 7.65% up to maximum taxable amounts, with the maximum total taxable income amount having increased again in 2023. This will be the same for 2024.
Workers pay Social Security taxes to support government programs in society. Social Security benefit payments issued by the government to retired individuals are funded using the aid of Social Security tax payments from current workers. When current workers retire, they will then become eligible to claim these government benefits in the future.
In 2023, the maximum taxable amount is up to $160,200 of income ($168,600 in 2024). Up to this amount, an employee is responsible for 6.2% of Social Security taxes and the employer is responsible for 6.2% of Social Security taxes. Self-employed individuals are responsible for both portions of the tax.
Certain individuals may claim an exemption and not be required to pay Social Security taxes. Some religious groups that openly oppose Social Security benefits may claim a religious exemption. Non-resident aliens may be exempt depending on their type of visa.
Students working at their university may be exempt. Lastly, workers for a foreign government may be exempt under certain circumstances. If you believe you may fall into one of these groups, consult your tax advisor.
Social Security is a significant benefit that helps millions of retirees, disabled individuals, and surviving spouses. The Social Security Administration adjusts benefits each year to keep up with inflation, which often means a bigger payment for recipients.
However, the annual increases may not be sufficient to sustain the program in future years. It isn’t wise to rely on Social Security to be your only source of income in retirement if you can save more. Many tax-advantaged savings accounts are available to build an additional nest egg.
Correction—Nov. 30, 2022: A previous version of this article wrongly stated that payroll taxes are based on an employee’s net pay when they are actually based on gross pay.
A senior Ford executive said Thursday the automaker is “at the limit” of what it can spend on higher wages and benefits for the United Auto Workers, and warned the union’s strike at the company’s most profitable factory could harm workers and slash profits.
“We have been very clear that we are at the limit,” Kumar Galhotra, head of Ford’s combustion vehicle unit, said during a conference call Thursday. “We stretched to get to this point. Going further will hurt our ability to invest in the business.”
Ford is open to reallocating money within its current offer in further bargaining with the union to secure an agreement, Galhotra said. Ford is also working with the UAW on a way to bring workers at joint-venture electric vehicle battery plants into the UAW-Ford agreement, he said.
UAW President Shawn Fain on Wednesday ordered a strike at Ford’s Kentucky Truck factory after Ford negotiators did not present a richer contract proposal.
UAW negotiators turned their attention on Thursday to talks with Chrysler parent Stellantis, union President Shawn Fain said, confirming a Reuters report.
“Here’s to hoping talks at Stellantis today are more productive than Ford yesterday,” Fain wrote on social media. Stellantis did not immediately comment.
The standoff between the UAW and Ford could soon affect thousands of workers who are not among the nearly 34,000 Detroit Three workers Fain has ordered to walk off the job since Sept. 15.
About 4,600 Ford workers could be idled because their jobs depend on production of Super Duty pickups and large Lincoln and Ford SUVs at Kentucky Truck, said Ford manufacturing vice president Bryce Currie.
Already, 13,000 workers at Ford suppliers have been furloughed because of earlier UAW walkouts at two Ford assembly plants, Ford supply chain chief Liz Door said. The shutdown of Kentucky Truck, Ford’s largest factory, could push a fragile supply chain “toward collapse,” she said.
Fain and other UAW officials have countered that Ford, General Motors and Stellantis can afford to increase pay for UAW workers beyond the 20% to 23% they have offered, end lower wage tiers for lower seniority and temporary workers, and restore defined benefit pensions lost in 2007 if they rein in share buybacks and cut excessive executive pay.
SHARP ESCALATION
The walkout at Kentucky Truck was a sharp escalation in the UAW’s slow-building campaign of strikes, and sent a warning to Stellantis and General Motors, whose wage and benefits offers fall short of Ford’s, based on summaries the automakers and the UAW have released.
Fain has scheduled a video address for Friday at 10 a.m. EDT (1400 GMT). In past weeks, Fain has used Friday addresses to order additional walkouts, or announce progress in bargaining.
Fain has yet to tip his hand as to what actions he will take Friday, if any.
Some analysts saw Fain’s decision to shut down Ford’s Kentucky Truck plant, which builds Super Duty pickups and Lincoln Navigator SUVs, as a sign that the endgame could be starting in the nearly month-long round of coordinated walkouts at the Detroit Three.
“Pressure was always needed to force a deal,” Evercore ISI analyst Chris McNally wrote in a note on Thursday.
White House press secretary Karine Jean-Pierre said the administration was closely monitoring the economic impact of the widening strike and still hoped both sides will reach a “win-win agreement.”
Last Friday, Fain said if needed, the UAW would strike the GM assembly plant in Arlington, Texas, that builds Cadillac Escalade, Chevy Suburban and other large, high-priced SUVs. GM’s Flint, Michigan, heavy-duty truck assembly plant is another potential strike target.
High-profit targets at Stellantis include the automaker’s Ram pickup truck factories in Sterling Heights and Warren, Michigan, as well as two Jeep SUV factories in Detroit.
“This puts everybody on notice,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. “If they haven’t brought anything new to the table since last week, GM and Stellantis should be worried.”
Analysts at Wells Fargo estimated that Ford will lose about $150 million per week in core profit from the Kentucky plant strike.
Ford officials said on Thursday that cutting a deal that does not allow the company to survive makes no sense and that striking the Kentucky truck plant would also hurt the UAW’s profit-sharing checks.
In a sign of the strike’s expanding impact, Delta Air Lines said on Thursday it is feeling a pinch from the automotive and entertainment labor strikes. Delta President Glen Hauenstein said the UAW strike has curtailed a “significant” amount of business in Detroit.
Automakers have more than doubled initial wage hike offers, agreed to raise wages along with inflation and improved pay for temporary workers, but the union wants higher wages still, the abolishment of a two-tier wage system and the expansion of unions to battery plants.
The UAW has room to expand its walkouts and increase the pressure on the Detroit Three to offer bigger wage gains, richer retirement packages and more assurances that new electric vehicle battery plants will be unionized.
Even with 8,700 workers at Ford’s Kentucky Truck plant now on strike, less than a quarter of the 150,000 UAW workers at the Detroit Three automakers are now on strike. However, thousands more have been furloughed from jobs at operations that are not on strike because automakers said the walkouts made their work unnecessary.
Ford said on Thursday that it already had 13,000 layoffs at its suppliers and that 4,600 of its own workers could be laid off at other plants.
Ford warned that workers at a dozen other factories could be sent home because of the truck plant walkout. Officials said new layoffs stemming from the Kentucky strike could begin in the coming days.
Its Kentucky truck plant, the company’s most profitable operation, generates $25 billion in annual sales, about a sixth of Ford’s global automotive revenue.
Fain and other UAW officials called a meeting with Ford at on Wednesday evening and demanded a new offer, which Ford did not have, a Ford official said.
“You just lost Kentucky Truck,” Fain said, according to the Ford official and a union source, speaking on condition of anonymity because the talks are not public.
Ford said the decision was “grossly irresponsible.”
Fain has said his aim is to keep the automakers off-balance by taking targeted action rather than a full strike.
The Detroit automakers will report third-quarter financial results between Oct. 24 and Oct. 31, and the UAW could use what are expected to be robust profits to press their case for a richer contract.
Before Wednesday’s Ford announcement, the union had ordered walkouts at five assembly plants, including two Ford assembly plants, at the three companies and 38 parts depots operated by GM and Stellantis.
(Reporting by Joe White in Detroit, Abhirup Roy in San Francisco and David Shepardson in Washington; Additional reporting by Priyamvada C in Bengaluru; Editing by Peter Henderson, Ben Klayman, Nick Zieminski and Matthew Lewis)
Several industry experts believe that the limits on the total number of Tweet viewership will make it difficult for new CEO Linda Yaccarino, to bring new advertisers to the platform.
Over the last weekend on July 1, Twitter introduced a temporary limit on the number of tweets that accounts can see each day. Last Saturday, Twitter boss Elon Musk said that unverified users can see as many as 600 tweets daily while Twitter Blue verified users can see 6000 posts.
This is an experiment to address “extreme levels of data scraping” and “system manipulation”. Although Musk has revised these limits to a higher number of tweet views, there’s been some backlash from some users.
Some experts from the marketing industry said that these new limits could undermine efforts by the company’s new Chief Executive Linda Yaccarino, to bring new advertisers to the platform. Yaccarino’s primary focus has been to mend relationships with advertisers who distanced themselves from the platform following its acquisition by Musk last year, as reported by the Financial Times.
On Sunday, July 2, Mike Proulx, research director said that the limits are “remarkably bad” for users and advertisers. He added:
“The advertiser trust deficit that Linda Yaccarino needs to reverse just got even bigger. And it cannot be reversed based on her industry credibility alone.”
Other experts from the marketing industry joined Prolux stating that the current decision could be bad for Yaccarino. Lou Paskalis, who founded a company that provides advice on advertising and used to be in charge of marketing at Bank of America, believes that Yaccarino is Musk’s final and most promising chance to save Twitter’s advertising earnings and the overall value of the company.
“This move signals to the marketplace that he’s not capable of empowering her to save him from himself,” he said.
Jasmine Enberg, a principal analyst at Insider Intelligence, expressed concern that limiting user views could have a “catastrophic” impact on Twitter’s advertising business. She mentioned that this move would make it even more challenging to convince advertisers to come back to the platform, which is already a difficult task.
Previously, Elon Musk criticized artificial intelligence platform firms like OpenAI, the creator of ChatGPT, for using Twitter data to build their large language models (LLMs). According to Kai-Cheng Yang, a researcher at Indiana University in Bloomington, the imposed limits on Twitter seem to be successful in preventing third parties, such as search engines, from easily scraping Twitter data as they did in the past. Yang mentioned that while it might still be possible, it would require more advanced and less efficient methods.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.