Equal pay but unequal Social Security and Medicare taxes?
To help for tax planning re: Roth conversions, etc., I run cash flow projections that I update after each time my wife or I get paid. For 2017, if trends hold, I just noticed that my wife and I may make roughly the same income this year as each other. But I also noticed that she may have $500 less in Social Security taxes and $100 less in Medicare taxes cut from her pay versus mine. Not a huge deal, but I would have figured it would have been the same given the roughly equal pay. Googling hasn’t been helpful but maybe I’m searching on the wrong terms. Anyone have any ideas why this would be the case?
Permalink Submitted by Alan - IRA critic on Wed, 2017-02-22 04:01
Perhaps she has higher pre tax medical premiums, FSA, HSA etc deductions which are exempt from SS and Medicare.
Permalink Submitted by Amar Patel on Wed, 2017-02-22 16:31
That must be it! I studied the paystubs a little more closely and do see that she does indeed have more pre-tax deductions than I do, so it does indeed make sense to see that she’d have less cut out for Social Security and Medicare. Thanks!
Permalink Submitted by William Tuttle on Wed, 2017-02-22 18:54
Another way you could check this is, see what each of your W-2 box 5 Medicare wages are. Box 3 Social Security (SS) wages would be misleading if one or both of you reached the SS max wage base.