Tax News

CCH (cch.taxgroup.com) reports:

Social Security and Supplemental Security Income (SSI) benefits will increase by 2.3 percent in 2008, according to the Social Security Administration (SSA). The rates for Old-Age, Survivors and Disability Insurance (OASDI) and Medicare Hospital Insurance (HI) taxes will remain unchanged at a combined 7.65 percent in 2008, but the maximum taxable earnings for OASDI purposes will rise from $97,500 to $102,000.
The SSA increases are based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of 2006 through the third quarter of 2007. For Social Security beneficiaries, the average monthly benefit amount for all retired workers will rise from $1,055 to $1,079, and the maximum monthly benefit will increase from $2,116 to $2,185. The monthly SSI federal payment standard for an individual will rise from $623 to $637; for a couple, the payment will increase from $934 to $956.
The retirement earnings test exempt amount (the point at which retirees begin to lose benefits in conjunction with their receipt of additional earnings) was eliminated for individuals age 65 through 69 as of January 2000. However, it remains in effect for individuals under full retirement age, and a modified test applies for the year in which an individual reaches full retirement age. "Full retirement age" is 65 and 8 months for individuals born in 1941, 65 and 10 months for those born in 1942.
For the year in which an individual attains full retirement age, the retirement earnings test exempt amount will rise from $34,440 a year to $36,120 a year. This test applies only to earnings for months prior to reaching full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit. No limit on earnings will be imposed beginning in the month in which the individual reaches full retirement age.
For retirees under full retirement age, the retirement earnings test exempt amount will rise from $12,960 a year to $13,560 a year, with $1 withheld for every $2 in earnings above the limit.
Social Security Administration News Release, 2007FED ¶46,674
Social Security Administration Fact Sheet, 2007FED ¶46,675
SFC Release: Baucus Comments on Social Security Cost-of-Living Adjustment
Other References:
Code Sec. 1401
CCH Reference - 2007FED ¶32,543.01
CCH Reference - 2007FED ¶32,543.07
CCH Reference - 2007FED ¶32,543.26
Code Sec. 1402
CCH Reference - 2007FED ¶32,580.01
Tax Research Consultant
CCH Reference - TRC INDIV: 63,050
CCH Reference - TRC INDIV: 63,052
CCH Reference - TRC INDIV: 63,054
CCH Reference - TRC INDIV: 63,060
CCH Reference - TRC INDIV: 63,100
CCH Reference - TRC INDIV: 63,108
CCH Reference - TRC INDIV: 63,500