The Social Security
Administrations said this week that the monthly benefits for nearly 62 million
recipients of Social Security will increase in 2013.
The 1.7 percent cost-of-living
adjustment will begin with benefits that more than 56 million Social Security
beneficiaries receive in January 2013. That is only about half of the 3.6
percent COLA increase in 2012, but better than the lack of an increase in 2010
and 2011. Increased COLA payments for more than 8 million SSI beneficiaries
will begin on Dec. 31, 2012
Some other changes that take
effect in January of each year are based on the increase in average wages.
Based on that increase, the maximum amount of earnings subject to the Social
Security tax (taxable maximum) will increase to $113,700 from $110,100.
Of the estimated 163 million
workers who will pay Social Security taxes in 2013, nearly 10 million will pay
higher taxes as a result of the increase in the taxable maximum.
Information about Medicare changes for 2013, when announced,
will be available at www.Medicare.gov.
For some beneficiaries, their
Social Security increase may be partially or completely offset by increases in
The Social Security Act provides for how the annual COLA is
calculated. For more information, visit www.socialsecurity.gov/cola.
If you have further questions regarding this or
any other part of your tax situation please contact your local Liberty Tax
office and we will be able to assist you further.
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.