Two jobs in one year - SS tax refund?
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Anonymous
| I left my fed job and took a different job in the nonprofit sector about halfway through the year. I have probably overpaid quite a bit of SS taxes because my combined income between the two jobs is over the SS pay cap. From what I have read I am eligible for a refund. Has anyone else been in this situation and did you get your refund without any problems? |
Anonymous
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Search Assist
If you have two jobs and your total earnings exceed the Social Security wage base limit, you may have overpaid Social Security taxes. You can claim a refund for the excess amount withheld when you file your tax return by using Form 843 if necessary. |
Anonymous
| Yes, have done this several times. Just another line and form on your tax return, and gets factored into what you owe or your refund amount. No big deal. |
Anonymous
| Thanks! This makes me happy. Even though on principle I support raising the cap! |
Anonymous
Well if the cap were raised, along with it you would get a higher payout at 65+. So just one of the reasons "raising the cap" doesn't help |
Anonymous
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Raising the cap helps somewhat. How much depends on what is done with the extra contributions. No reason the law couldn't create a new bend point in pia to increase progressivity of benefits and extend trust fund solvency.
To op's actual question, I overpaid fica in one year and had no trouble getting the refund. H&R block software was quite user-friendly for this and I imagine any tax prep program could handle it. |
Anonymous
Because of the way Social Security returns are calculated (bend points/AIME/...), the higher one's earnings, the worse the ROI. Higher payout in dollars, but even with the current cap, "... for upper-income individuals, even though with above-average health, the ROI on Social Security FICA taxes is generally negative." (https://www.kitces.com/blog/social-security-fica-self-employment-taxes-return-on-investment-roi-irr/) Remove the cap, the ROI would get increasingly negative. |
Anonymous
Nope, not if raising the cap's purpose is to make social security financially stable. Raise the cap, but keep payouts the same. |
Anonymous
Yes, raising or removing the cap seems like a much better way to address the shortfall than raising the retirement age or otherwise reducing benefits. |
Anonymous
That's not how it works - just raising the cap alone would in fact fix social security. |
Anonymous
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Because of the way Social Security returns are calculated (bend points/AIME/...), the higher one's earnings, the worse the ROI.
Remove the cap, the ROI would get increasingly negative. Yeah, people with high earnings should have a negative ROI from their SSI contributions. That would be the point of raising the cap. The high earners don't need the social safety net. |