Advertisement

The government deducts Social Security tax from income earned by both self-employed and company-employed workers. Self-employed workers must apply this tax to their earnings when filing federal and state income taxes, while employers withhold Social Security tax from their employees' paychecks automatically. This tax is used to pay benefits to people who have retired and are eligible to receive Social Security benefits, as well as benefits to disabled individuals, widowed individuals, and children with deceased parents. Currently, annual incomes exceeding $127,000 are not subject to Social Security tax.

Advertisement

1. History of Social Security

In 1935, President Franklin D. Roosevelt established what is now the Social Security Administration. Originally called the Social Security Act, this program was part of Roosevelt's New Deal program meant to help pull the U.S. out of the Great Depression and further assist poor, unemployed, and older individuals. FDR was the first president to support government assistance for people over 65. The original Social Security Act also included Aid to Families with Dependent Children and a variety of public health services.

NoDerog / Getty Images
Advertisement

More on Facty Health

Disclaimer

This site offers information designed for educational purposes only. The information on this Website is not intended to be comprehensive, nor does it constitute advice or our recommendation in any way. We attempt to ensure that the content is current and accurate but we do not guarantee its currency and accuracy. You should carry out your own research and/or seek your own advice before acting or relying on any of the information on this Website.