Payroll and Social Security Wage Base
The biggest change for 2022 in regard to payroll taxes is the increase in the Social Security annual wage base. Wages are subject to a 6.2% Social Security tax. In 2022, it jumped from $142,800 in 2021 to $147,000.
The Medicare tax remains the same at 1.45%. However, any wages or self-employment income you earn over $200,000 ($250,000 if married filing jointly) are subject to an additional 0.9% Medicare tax on your income tax return.
Household Employee Payroll
If your family pays a household employee (a nanny, for example) at least $2,400 during 2022, you are required to withhold Social Security and Medicare taxes from their pay and remit it to the IRS. You would prepare a Schedule H with your income tax return.
As their employer, you will also be required to issue them a W-2 and pay your own set of quarterly payroll taxes. A payroll service can assist you in handling these tasks and filing the proper payroll tax returns. To understand how this may affect your personal situation, consult with a CironeFriedberg tax advisor.
If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford) or email us at info@cironefriedberg.com.
