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Social Security - Part 1

The social security earnings base and tax rates both increase effective January 1, 1988. The earnings base (the maximum amount of earnings that are taxable) increases to $45,000 (up from $43,800 in 1987). The self-employment tax (the social security tax for self-employed persons, including clergy), increases from 12.3% to 13.02%. The maximum self-employment tax, payable by any minister or self-employed person earning at least $45,000 in 1988, is $5,859 (up from $5,387 in 1987). The FICA tax rate (imposed on both an employer and employee) increases from 7.15% to 7.51%. The maximum FICA tax payable by an employee in 1988 is $3,379.50 (up from $3,131.70 in 1987).

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Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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  • January 1, 1988

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