Fica Limit 2007

Frivolous Tax Arguments Can Have Serious Consequences for Employers

IRS has heard these arguments, too, and the agency can succinctly sum up the claims: They don't work.

That is what the actor Wesley Snipes found out not long ago. He began serving a three-year prison term in December 201 0 for his conviction on three counts of willful failure to file federal income returns for three years. He also failed to withhold income taxes for employees of his film production companies. Snipes, convicted in 2008, had filed appeals, but was ordered by a judge to report to prison after a request for bail was turned down in late 2010.

Snipes earned more than $37 million from 1 999 to 2004, investigators said.

The actor's tax troubles arose from embracing a number of tax positions considered frivolous by IRS: wages are not taxable income; employers are not required to withhold taxes; filing federal tax or information returns or paying tax is voluntary or optional and is not required by law; a taxpayer may lawfully avoid income tax by sending income offshore; nothing in the Internal Revenue Code imposes a requirement to file a return or pay a tax unless IRS responds to questions, correspondence, or a request to identify a provision of the code requiring the filing of a return or the payment of tax; and taxpayers may reduce or eliminate their federal tax liability by altering a tax return, including striking out or altering the "penalty-of-perjury" declaration.

Those claims and others have been repeatedly rejected by courts.

After June 2000, Snipes took his positions to another level. He had his companies stop deducting payroll and income taxes from employee pay, and Snipes began to proselytize his theory of tax resistance to the employees. He invited several employees to an educational seminar at his house. When an accounts-payable employee attended the seminar and questioned the theory, Snipes ordered her to leave his house, later telling her that he was "disappointed" in her and that if she was "not going to play along with the game plan," she should find another job.

FICA Limit Complete Tax Collection Mechanism: wage and tax rate

It helps to know the FICA Limit as well as wage, rate, tax, employee-employer relations, withholding and other aspects of FICA. Some of these aspects are discussed below.

Payroll taxes for the Social Security benefits are generally collected under the authority of the Federal Insurance Contributions Act or FICA. Mostly people refer to these taxes as FICA tax. The FICA tax had its origins in 1935 when the tax was part of the Social Security program

FICA Taxes After the tax-provisioning portion of the Social Security Act – Title VIII – was taken out of the program in the year 1939, it was placed into the Internal Revenue Tax code. At that time a name more descriptive than Title VIII was needed. For this reason the tax was renamed as the Federal Insurance Contributions Act or simply FICA. Till date, FICA remains the tax collection mechanism for social security. FICA today is used for providing for the federal system of old age, disability, survivors and hospital insurance. The first three of these are funded by the Social Security system and hospital insurance is funded by a Medicare tax. Both the employees as well as the employers are required to contribute to FICA taxes by means of regular payroll deductions. However, the good news is that there is a limit to the amount of FICA taxes an employee is generally required to pay

FICA Rates of Tax FICA taxes are generally collected at a rate of 7.65% on gross earnings that is earnings before any deductions. The breakdown of FICA is 6.2% for Social Security (Old-Age, Survivors, and Disability Insurance or OASDI) and 1.45% for Medicare. The data below shows the FICA limits for 2005, 2006, 2007, 2008, and 2009

FICA Tax and Social Security Limits 2005 In case you work more than one job in a tax year and your earnings are in excess of 2,000 in 2008 or 6,800 in 2009, then you have perhaps paid too much Social Security tax. This is because if you have more than a job in a year, each of your employers is required to withhold Social Security taxes on your wages. In a situation like this, you may end up exceeding the maximum Social Security contribution limit.

U.S. Master Compensation Tax Guide (2008)

RIA's complete analysis of the Economic Stimulus Act of 2008, and the AMT Patch, Mortgage Relief, Energy, Technical Corrections, and other late 2007 tax acts, with code sections as amended and committee reports

Mandated Benefits 2007 Compliance Guide

Complete Guide To Human Resources & the Law 2009

Internal Revenue Cumulative Bulletin 2007-2, July-December