Which amount represents the maximum Social Security taxable earnings?

Which amount represents the maximum Social Security taxable earnings?

• A. $110,000
• B. $110,100
• C. $112,000
• D. $110,500

Answer: (B)

Social Security tax is applied only to earnings up to a yearly wage base, with any earnings above that cap not subject to Social Security tax. This cap changes each year to reflect inflation. For the year in question, the wage base is 110,100 dollars, so that amount represents the maximum earnings subject to Social Security tax. The other figures would correspond to different years’ caps and aren’t the correct maximum for this year. (Note: Medicare tax has no cap.)

Social Security tax is applied only to earnings up to a yearly wage base, with any earnings above that cap not subject to Social Security tax. This cap changes each year to reflect inflation. For the year in question, the wage base is 110,100 dollars, so that amount represents the maximum earnings subject to Social Security tax. The other figures would correspond to different years’ caps and aren’t the correct maximum for this year. (Note: Medicare tax has no cap.)