Overview
1. There are three types of employment taxes that employers and employees must be concerned with:
- Social Security Taxes - “Federal Insurance Contributions Act” (“FICA”) - I.R.C. §§3101 - 3128
- Unemployment - “Federal Unemployment Tax Act” (“FUTA”) - a joint federal and state government program for unemployment insurance - I.R.C. §§3301-3311; and
- Withholding on Wages - I.R.C. §3402 and 3403.
2. Self-employed persons are subject to the Self-Employment Contributions Act (“SECA”), I.R.C. §§1401 - 1403.
- The SECA rates are 12.4% for Old Age, Survivors, and Disability Insurance and 2.9% for Hospital Insurance for a combined total of 15.3%.
3. The wage base for Old Age, Survivors, and Disability Insurance is capped at $106,800 in 2009, but Hospital Insurance has no cap.
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