Social Security to release 2014 COLA data next week

Next week, the Bureau of Labor Statistics will issue the September Consumer Price Index report, the final piece of data that the Social Security Administration needs to plug into its annual cost of living adjustment formula. Social Security benefits — and the taxable wage base for workers — will be slightly higher next year as a result of the COLA. The CPI was one of several key economic reports that were delayed due to the 16-day government shutdown. It is now scheduled to be released next Wednesday. "We usually send out our COLA press release shortly after the CPI is announced by BLS in the morning," Social Security spokeswoman Kia Anderson wrote in an e-mail. The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion, the OASDI, is 6.2% on earnings up to the applicable taxable maximum amount. The Medicare portion (HI) is 1.45% on all earnings, even those above the taxable OASDI limit. Portions of the Social Security and Medicare taxes are paid by employers and employees for a combined payroll tax rate of 15.3%. Self-employed individuals pay both portions of the tax. Starting this year, very high earners are subject to an additional Medicare payroll tax of 0.9% on earnings above $200,000 for single workers and $250,000 for married workers filing jointly. An employer is required to begin withholding the additional tax in the pay period when an employee's wages exceed $200,000. The new Medicare tax, created by the Affordable Care Act to help finance expanded health care coverage, applies only to employees, not employers.