by Carolyn Rothwell on April 23, 2013

Client Exempt from Paying FICA Taxes? TOTAL Planning Suite User Question


TOTAL Planning Suite customer question:

I am trying to exempt a client’s wages from FICA taxes.  I checked the box on the Income Tax Data File Status/Options screen to indicate Individual 1’s wages are exempt but I still see a listing for FICA on both the Easy Money and Golden Years reports.  Can you help?

Money Tree's support response:

Checking the “Wages Exempt” from FICA is the correct action to prevent FICA taxes.  Note, the line item for FICA & HI Tax will still display, but it should only be including 1.45% for HI tax (Medicare).  Golden Years has a supporting worksheet for this number on the FICA Worksheet D15 were you can see if it is indeed still including the 6.2% FICA rate, or if it’s just the 1.45% for Hospice Insurance. 

Tax Data - File Status / Options tab, check "Wages Exempt" under FICA Tax.  This will ensure the clients salary is exempt from FICA taxes.  Any self-employment income will still be charged FICA and cannot be set as exempt.

FicaTax

The Current Year Cash Flow on Easy Money or Golden Years will still display a line for "FICA Taxes".  This line represents total payroll taxes - which includes both Social Security and Medicare.  

CurrentYearCashFlow
If you are running Golden Years, you will find a breakdown on the FICA Worksheet, report D15. Here you can see there is no FICA tax charged on wages, but there is a tax charge for Hospital Insurance (Medicare). 

FICA Taxes

Do you have a question for Money Tree's support team?  Give us a call for a quick and clear answer!  Call our toll free number (877) 421-9815 ext 0 between 6:30 am - 5:00 pm, M-F or email support@moneytree.com. 

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Carolyn Rothwell

Carolyn enjoys spending her time building Money Tree Software's brand and products. Her experience creating and delivering financial plans for a full-service financial planning firm and supporting advisors working to provide the best planning to their clients as a Money Tree support member has provided an excellent understanding of the importance of financial planning.