November 9, 2013
What percent does the employee pay in FICA tax out of each paycheck? How can a person eliminate FICA taxes?
What percent does the employee pay in FICA tax out of each paycheck? How can a person eliminate FICA taxes?
6.2% for Social Security plus 1.45% for Medicare that is automatically withheld from paychecks. the employee does it for 0.9 percent of the income. In place of FICA you can possibly get the “Fair tax”.
7.65%; passive income eliminates the FICA deduction.
Well done and quick by both of you, but Katherine got the part II right as well. The employee pays 7.65% and the employer pays 7.65% from your gross income at work. The way to eliminate those FICA taxes are just what Katherine stated, passive income. Income earned from other sources not affiliated with work. Capital gains and dividends from your investments are two examples. You want to reduce your taxes? Increase your passive income, it’s that simple.