When setting up your tax information at the beginning of the year, a very important item to review would be the FICA withholding limit. FICA is an acronym of Federal Insurance Contributions Act. The FICA taxes consist of Social Security taxes as well as Medicare taxes. The maximum wage limit for FICA increases every year. The taxpayers employer is responsible for deducting a specific
. percentage of the taxpayers salary from their paychecks. Once a taxpayer reaches the maximum wage limit for the tax year no additional Social Security taxes are collected. However, there is no wage limit for Medicare taxes. You can find more information here: http://www.irs.gov/formspubs/article/0,,id=177943,00.html
