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Adjustments Social Security Wage Base

Adjustments to Social Security Wage Base Ahead
Adjustments to Social Security Wage Base Ahead 850 500 smolinlupinco

In 2024, the Social Security wage base for employees and self-employed people will increase.

Employees and employers can expect the wage base for computing Social Security tax to rise to $168,600 next year—a significant jump from the wage base of $160,200 in 2023. 

Self-employment income and wages above this amount won’t be subject to Social Security tax.

The basics on the Social Security wage base increase

Employers pay two taxes under the Federal Insurance Contributions Act (FICA): Social Security tax (for Old Age, Survivors, and Disability Insurance) and Medicare tax (for Hospital Insurance).

The amount of compensation subject to the Social Security tax is capped at a maximum, but there is no maximum amount for the Medicare tax. 

In 2024, employers should expect a FICA tax rate of 7.65%. This includes 6.2% for Social Security, with the remaining 1.45% going to Medicare. 

What is changing in 2024

In 2024, employees will pay a total of:

  • 6.2% Social Security tax on the first $168,600 of wages (6.2% x $168,600 makes the maximum tax $10,453.20)
  • 1.45% Medicare tax on the first $200,000 of wages ($250,000 for joint returns, $125,000 for married taxpayers filing separate returns)
  • 2.35% Medicare tax (regular 1.45% Medicare tax plus 0.9% additional Medicare tax) on all wages in excess of $200,000 ($250,000 for joint returns, $125,000 for married taxpayers filing separate returns)

In 2024, self-employed people pay the following rates in self-employment tax:

  • 12.4% Social Security tax on the first $168,600 of self-employment income, for a maximum tax of $20,906.40 (12.4% x $168,600)
  • 2.90% Medicare tax on the first $200,000 of self-employment income ($250,000 of combined self-employment income on a joint return, $125,000 on a return of a married individual filing separately)
  • 3.8% (2.90% regular Medicare tax plus 0.9% additional Medicare tax) on all self-employment income in excess of $200,000 ($250,000 of combined self-employment income on a joint return, $125,000 for married taxpayers filing separate returns)

What to know if you have more than one employer

Many people worked more than one job to make ends meet in 2023. If your employees are among them, you might have questions. 

Employees with a second job will have taxes withheld from two different employers. They may not ask you to stop withholding Social Security tax once they reach the wage base threshold. Even when an individual’s combined withholding exceeds the maximum amount of Social Security taxes that can be imposed for the year, each employer must withhold Social Security taxes. 

For any excess withheld, the employee should see a credit on their tax return.

Questions? Smolin can help.

If you have questions about payroll tax filing or payments, contact the helpful team at Smolin. We’ll help ensure you stay in compliance while achieving the most favorable tax rate possible.

Catch a tax break for making energy-efficient home improvements this summer
Catch a tax break for making energy-efficient home improvements this summer 850 500 smolinlupinco

According to the National Weather Service, nearly 190 million Americans have been under a heat advisory this summer. These scorching months might have you thinking about ways to make your home more energy efficient so that you don’t pay utility prices that are just as high as the heat index.

If you do decide to make some upgrades, there’s a new tax break that could ease some of the financial burden of the process. The Inflation Reduction Act of 2022 is an enhanced residential energy tax credit that can be used to mitigate the costs of qualifying improvements.

Who’s eligible for the tax credit

By making eligible energy-efficient improvements to your home on or after January 1, 2023, you might qualify for a tax credit of up to $3,000, and you can claim this credit for any eligible improvements through 2032.

This tax credit equals 30% of specific qualified expenses for energy improvements to a home located in the United States, including:

  • Qualified energy-efficient improvements installed during the year
  • Residential “energy property” expenses
  • Home energy audits

Of course, there are limits on the allowable yearly credit and the amount of credit for specific expenses.

The maximum claimable credit available each year is:

  • $1,200 for energy property costs and specific energy-efficient home improvements, with limits on doors ($250 per door and $500 total), windows ($600 total), and home energy audits ($150)
  • $2,000 per year for qualified heat pumps, biomass stoves or biomass boilers

In addition to the credit for windows and doors, other energy property includes central air conditioners and hot water heaters.

Prior to the 2022 law, there was a lifetime credit limit of $500. Today, this credit has no lifetime dollar limit. You’re allowed to claim the maximum annual amount every year that you make qualifying improvements until 2033.

For instance, you can make a few improvements this year and take a $1,200 credit for 2023, and then make additional improvements the next year to claim a $1,200 credit for 2024.

It’s important to note that the credit is claimed in the year in which the installation is completed.

Additional limits and rules

Generally speaking, the credit is available for your primary residence, although some improvements on secondary residences may qualify. 

If a property is used exclusively for business, you’re not allowed to claim this credit. 

If your home is partially used for business, the amount of credit you can receive will vary. For business use maxing out at 20%, you can claim the full credit, but anything over 20% will get you a partial credit.

While the credit is available for specific water heating equipment, you can’t claim it for anything that’s used to heat a swimming pool or hot tub.

This credit is nonrefundable, which means you can’t get back more on the credit than you owe in taxes. Additionally, you can’t apply any excess credit to future tax years. However, there’s no phaseout based on your income level, so even high-income taxpayers can benefit from this credit.

Have questions? Smolin can help

If you have questions about making energy-efficient improvements or purchasing energy-saving property for your home, contact the knowledgeable professionals at Smolin. We’ll show you how to make the Inflation Reduction Act and other tax breaks work for you.

NJBIZ Leaders in Finance Paul Fried

Paul Fried Selected as an NJBIZ Leader in Finance
Paul Fried Selected as an NJBIZ Leader in Finance 1200 628 smolinlupinco

Smolin is pleased to announce that Paul Fried, CEO-elect, has been selected as an NJBIZ Leader in Finance. NJBIZ Leaders in Finance recognizes financial executives whose passion and energy help drive their company’s success. Honorees are selected ​​because of their professional and civic engagement and their innovative contributions to their fields. They will be recognized at a ceremony on April 25, 2023. 

“Paul has been an instrumental team member at Smolin since he joined our family” shares Ted Dudek, Managing Member of the Firm. “His work for clients over the years has been impactful at all levels. His contributions to both Smolin and our community make him well-deserving of this honor.”

As a New Jersey Certified Public Accountant with over 40 years of industry experience, Fried has a long history at Smolin. He works with clients in the construction, real estate, manufacturing, distribution, and professional services industries and advises on tax matters, forensic accounting, and mergers and acquisitions.  

Paul currently serves on Smolin’s Executive, Merger and Acquisition, Finance, Strategic Planning, and Wealth Management committees. Fried is also a member of the American Institute of Certified Public Accountants and the New Jersey Society of Certified Public Accounts. 

About NJBIZ Leaders in Finance awards

NJBIZ Leaders in Finance is conferred by NJBIZ, a publication of Bridge Tower Media. A description of the selection methodology is available here. 

Following an open nomination period, honorees are chosen by a panel of independent judges with experience in the financial field. The award categories include banking, corporate, investment, and professional. Selections are based on the nominees’ involvement in their industries and communities, their professional achievements, and innovative ideas. 

About Smolin 

Since 1947, Smolin has been committed to providing industry-leading professional financial and accounting services uniquely designed to meet the needs of each and every client. Smolin’s attention to the needs of each client has helped them become the successful and respected

Smolin Lupin 75th Anniversary

Smolin, Lupin & Co., LLC Celebrates 75 Years of Excellence
Smolin, Lupin & Co., LLC Celebrates 75 Years of Excellence 1600 837 smolinlupinco

Smolin Lupin, an Independent Member of the BDO Alliance USA and one of the NJBIZ Top 20 Public Accounting Firms in New Jersey, is celebrating 75 years of excellent accounting services helping clients achieve success. 

Since 1947, Smolin Lupin has been dedicated to developing long-lasting client relationships by providing professional financial and accounting services uniquely designed to meet the needs of each and every client. 

Smolin is known for helping clients and businesses grow through quality tax, accounting, and advisory services. Smolin helps clients meet their financial goals, and their innovative tax and accounting services have helped countless businesses grow and thrive in the always-changing market. 

“We’re proud of the past 75 years of Smolin, and we thank our incredible team, loyal clients, and the adaptability of the business as a whole,” says Smolin Member of the Firm and member of Smolin’s Executive Committee Henry Rinder.

Smolin’s roots take them back to Newark, New Jersey, servicing a core clientele of private, closely held businesses and professional firms. They helped grow what used to be small businesses and start-ups into medium-sized firms and large corporations. 

As they helped their clients grow, they continued to grow themselves, evolving into a full-service accounting firm with offices in Fairfield, Red Bank and Spring Lake Heights, New Jersey, and Juno Beach, Florida.

With their continued growth—and exceptional personnel—Smolin now offers a complete menu of traditional services from tax planning and preparation, audits and assurance, to specialized services, which include litigation support, forensic accounting, business consulting, estate planning, business valuations and much more. They’ve expanded to serve clients in various industries including (but not limited to) professional services, healthcare, hospitality, non-profit organizations, real estate development, and technology. 

But one thing has remained constant in Smolin’s 75 years of business: their commitment to offering clients the knowledge and expertise to help their businesses grow and thrive. Through their many years of experience and active service with their clients, Smolin’s team brings expertise to advise clients on key issues regarding their respective industries. 

“I’m excited about the future of our organization, and seeing the next levels of what’s to come—and how the future will help Smolin grow into even higher levels of excellence,” says Ted Dudek, Smolin President and Managing Member of the Firm. 

roche-miseo-barchetto-joins-smolin-lupin

Roche Miseo Barchetto Joins Smolin Lupin 
Roche Miseo Barchetto Joins Smolin Lupin  1600 1067 smolinlupinco

FAIRFIELD, NJ – January 19, 2023 – Smolin Lupin, an Independent Member of the BDO Alliance USA and one of the NJBIZ Top 20 Public Accounting Firms in New Jersey, is pleased to announce the merger of Roche Miseo Barchetto, LLC, a CPA firm headquartered in Parsippany, New Jersey. 

The professional team from Roche Miseo Barchetto, LLC services clients throughout the tri-state area. With a specialty in accounting for contractors spanning over 35 years, the firm has built a strong reputation in the surety and banking community. RMB also services wholesale distributors, professional service entities, and real estate professionals.

“We are thrilled to have RMB join us in providing the quality accounting and consulting services Smolin has always been known for,” said Ted Dudek, CPA and Managing Member of the Firm. “We believe Smolin will benefit greatly from RMB’s accounting and tax experience and commitment to quality and timely service.”

This merger will expand Smolin’s ability to deliver industry-leading financial and accounting solutions throughout New Jersey. RMB’s unique specialty in accounting for contractors will enhance Smolin’s existing client base in the construction industry.

“Our merger with Smolin will allow us to expand our client services and provide the necessary specialization in an ever-expanding marketplace of accounting and tax services,” said Carmen Miseo, CPA. “The cultural synergies between the two companies are apparent, as we share the same vision and philosophies. We look forward to continuing to service our clients in the same manner that you have grown accustomed to.”

As part of this merger, the RMB staff will relocate to Smolin’s Fairfield, New Jersey offices.

About Smolin Lupin

Since 1947, Smolin has been committed to providing industry-leading professional financial and accounting services uniquely designed to meet the needs of each and every client. Smolin’s attention to the needs of each client has helped them become the successful and respected CPA firm they are today. Smolin Lupin is an Independent Member of the BDO Alliance USA and one of the NJBIZ Top 20 Public Accounting Firms in New Jersey.

About Roche Miseo Barchetto, LLC

In 1987 Carmen Miseo and Richard Roche founded Roche Miseo & Co. and gave rise to what is now known as Roche Miseo Barchetto, LLC. Christopher Barchetto joined the firm in 1998 and became a partner in 2006. Today the firm thrives, servicing clients throughout the tri-state area. RMB’s commitment to quality and timely service is the driving force behind the firm’s growth over the years.

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