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  Why are my taxes only "estimated" on my Statement?
  Question
  Why are my taxes only "estimated" on my Statement? How did you calculate the amount?
  Answer
 

The Internal Revenue Service collects your Social Security and Medicare taxes. At SSA, we do not keep a record of those taxes; we record only your earnings because your earnings are what we use to calculate your benefits.

The tax rates you pay for Social Security and Medicare have changed several times since Social Security first began back in 1937. For 2008, you and your employer each pay Social Security taxes of 6.2 percent on the first $102,000.

You each also pay Medicare taxes of 1.45 percent on all your wages. If you are self-employed, your Social Security tax rate is 12.4 percent and your Medicare tax is 2.9 percent on those same amounts of earnings. To estimate the total tax amounts we show on your Statement, we multiplied your reported earnings for each year that you worked by the tax rate for that year. We then added all the years together. If you had both wages and self-employment earnings in the same year, we estimated the taxes for that year as if the total amount was wages. If you had both Social Security earnings and government earnings that qualified for Medicare in the same year, we estimated the combined Medicare taxes you paid.

For the tax rates in past years, see our Tax Rate Table.


 
 
 
  
 
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