July 27, 2013
What is FICA and what percentage comes out of your monthly paycheck? What type of income eliminates the FICA deduction?
What is FICA and what percentage comes out of your monthly paycheck? What type of income eliminates the FICA deduction?
The FICA tax is intended to provide funds for social security and medicare. 7.65% comes out of your monthly paycheck for the FICA tax. No FICA tax is taken out of passive income.
You said it so well with so few words, Katherine. Outstanding! FICA comes out of your gross earned income (job income). FICA does not come out of passive income. Here are a few types of passive income: capital gains, dividends, pension and retirement money, rent payments from tenants, book royalties. Strive to increase your passive income not only to reduce your taxes, BUT also to increase your freedom. Freedom? The freedom to one day escape the world of work. You can do it!