If you pay for any benefits from your employer, such as health or life insurance, any premiums you pay will come out of your paycheck. There are a few other deductions that can impact the size of your paychecks. For help filing your taxes and maximizing your deductions, consider working with a financial advisor who specializes in taxes. If you fall into this camp, make sure that during tax season you look into possible deductions to help recoup the money you spend on the “employer” portion of FICA taxes. Taxpayers who are self-employed will have to pay the entire Social Security and Medicare contributions themselves. If you earn wages in excess of $200,000, they are subject to a 0.9% Medicare surtax (though employers do not match this surtax). Your employer then matches those amounts, so the total contribution is double what you paid.

Social Security tax is withheld at 6.2% and Medicare tax at 1.45% of your wages. Together, these two make up the FICA taxes. This new W-4 now includes a five-step process that allows you to indicate any additional income or jobs, as well as other pertinent personal information.īeyond federal income taxes, your employer will also withhold Social Security and Medicare taxes from each of your paychecks.

The new form doesn't let filers claim allowances anymore, nor are personal or dependency exemptions allowed. It’s also worth noting that the IRS made major revisions to the W-4 in recent years.

Number of cities that have local income taxes: 2Įxactly how much your employer deducts from your wages for federal income taxes depends on factors like your marital status, salary and whether you have any dependents.

Median household income: $81,855 (U.S.

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