THE NEW HOLISTIC RETIREMENT • 75 In 2014 , the Social Secur ity taxable earnings cap was $117,000. That meant, if you made $90,000, you paid Social Secur ity taxes on all of it, but, if you made $120,000, you paid taxes only o n the firs t $117,000 . In th at case , $3,000 would not be subject to Social Security tax. Things changed in 2015, however. The maximu m taxable ea rnings for Social Secur ity incr eased to $118,500. So, if you ea rned $120,000 in 2015, you no l onger a voided tax es on $3,000, onl y on $1,500. You paid more in taxes despite your income staying the same. If you d on’t believe ther e ar e s neaky ways your taxes coul d go up, consider one of my friends, Mattie. She run s a successful cat ering bu siness, servicing weddings and speci al events in our community. Several years ago at tax time, Mattie discovered she owed $1,266 more in taxes than she planned. She didn’t have more income than the previous year, and she knew her tax bracket hadn’t cha nged. There ha d b een no new tax increa ses announced by Congress. She was more than a little confused. Her accountant quickl y cl eared it up for her: I n the Affordable Care Act (otherwise known as Obamacare), there was a provisio n to increase the threshold for Soci al Security taxes . Mattie no w owed Soci al Security taxes o n a larger par t of her income, and, accordingly, her tax bill was higher. Since 2012, the federal government ha s ra ised tax es on capital gains and dividends, M edicare surtax , payroll taxes, and taxe s f or h igher e arners . T hat’s just in the last decade. These “stealth” taxes and the elimination of deductions can impact you in other areas, too. For example, your Medicare Part B premiums are based, in part, on income fro m previous years . If sudd enly you have fewer deductions and more benefits being taxed, your taxable income goes up—and so do your premiums.
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