This year will bring some new rules for taxpayers along with some bureaucratic changes to Social Security and the Social Security Administration. Here are 7 of the most important ones.
The End of the Payroll Tax Cut – One of the biggest changes – and the one that probably gets the most attention – is the end of the temporary payroll tax cut. Workers will now contribute the full 6.2 percent on earnings up to $113,700 to Social Security (it was 4.2 percent in 2011 and 2012), and many are seeing this as a tax increase when they can least afford it.
No More Paper Checks – On March 1, paper checks will no longer be mailed out to those receiving Social Security. Payments will have to be either direct deposited into a bank account or loaded onto a prepaid debit card.
Benefit Amount Increases – For a worker retiring at full retirement age, the maximum monthly payment increases to $2,533, up from $2,513 in 2012. Every recipient will see a boost in their monthly check of 1.7 percent.
Reduced Office Hours on Wednesdays – To save money and avoid paying overtime, Social Security offices will close at noon every Wednesday.
My Social Security Accounts – Online access to services is expanding with the launch of my Social Security account , giving workers simpler access to their payment history, earnings record, and any communications from the Social Security Administration.
Higher Taxable Income Cap – The maximum amount of earnings subject to Social Security taxes is now $113,700, up from $110,100 in 2012.
Higher Earnings Limit – Retirees between ages 62 and 66 who continue to work while collecting their benefits can earn up to $15,120 in 2013 (was $14,640 in 2012) before seeing any of their Social Security payment withheld. For every $2 over the earnings limit, $1 in benefits will be withheld. For people turning 66 this year the limit is $40,080, after which $1 of every $3 earned will be withheld.