Social Security overpayments while OE?
I have a question regarding social security overpayment. Since employers match social security, we are over employed, and if you are in an overpayment scenario, wouldn't the employers also receive some sort of refund? And, wouldn't that raise red flags of why they are receiving it? Especially in the scenario of a large refund? Could this tip them off of another J of almost equal payout?
Solution:Jump to solution
See this article: https://turbotax.intuit.com/tax-tips/jobs-and-career/changing-jobs/L5ElUIrh6
Specifically this note:
Note: Your withholding may jump if you switch jobs after earning more than the Social Security wage base for the year ($160,200 in 2023, $147,000 in 2022). That's because when you reach that point, your employer stops withholding Social Security taxes. But when you change jobs, your new employer must withhold the tax on the amount they pay you up to the wage base, even though you don't really owe more. On the bright side, any excess Social Security tax withheld will be refunded when you file your tax return for the year....
Changing Jobs? Tax Implications and Tax Forms for a New Job
How does starting a new job affect your taxes? Learn what forms, deductions, and considerations you should keep top of mind if you've recently switched jobs or careers.
1 Reply
Solution
conscious-sapphireβ’12mo ago
See this article: https://turbotax.intuit.com/tax-tips/jobs-and-career/changing-jobs/L5ElUIrh6
Specifically this note:
Note: Your withholding may jump if you switch jobs after earning more than the Social Security wage base for the year ($160,200 in 2023, $147,000 in 2022). That's because when you reach that point, your employer stops withholding Social Security taxes. But when you change jobs, your new employer must withhold the tax on the amount they pay you up to the wage base, even though you don't really owe more. On the bright side, any excess Social Security tax withheld will be refunded when you file your tax return for the year.TLDR: Your employer's obligation is to pay social security on wages they pay you (up to a percentage of 160,200 gross as of 2023), whereas your obligation on your personal income taxes (across all jobs) is 6.2% of 160,200. This means that for you, you will get a refund, but your employers would not. The govt wins because they get twice more in taxes for social security. π Also keep in mind, a lot of conversations around "two jobs" and "leaving one job for another" have similarities in answers.
Changing Jobs? Tax Implications and Tax Forms for a New Job
How does starting a new job affect your taxes? Learn what forms, deductions, and considerations you should keep top of mind if you've recently switched jobs or careers.