By M Katie Helle, CPA – – –
After reading “Understanding You Paycheck,” you may be wondering why you are paying Social Security tax. Social Security was created to promote the economic security of our country.
This program started in the late 1939s to provide benefits for families of deceased workers and has evolved to what it is today – providing additional services for disabled workers, retirees, and health insurance for beneficiaries. The Social Security Administration touts this to be the most successful anti-poverty program in the country’s history.
You contribute 6.2% of your earned wages towards this program with each paycheck you receive. The amount you will receive from Social Security later in life depends on how much you contribute through your working years. The money you pay in taxes is not held in a specific account to use when you are eligible for the benefits. The money you pay now helps to pay the people collecting benefits now.
The Social Security Administration provides a great tool on their website to track what you have paid through your working career and helps you project the amounts you will receive during retirement based on what you have paid in tax. You can create an account by clicking here.
Click here for more information on Social Security and the benefits they provide.
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Katie Helle has been in public accounting since 2009, with experience in individual and small business taxation, specializing in payroll and sales tax reporting and compliance and QuickBooks accounting software. She is an Arizona native and resides in Chandler, Arizona with her husband, young daughter, and two goldendoodles. Outside the office, she is actively involved with community outreach, enjoys fitness, and can be found with a power tool or two in her hand for her many crafts.