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My wife changed jobs mid-year 2014 and her new employer took over $6K in Social Security tax withheld. Her first employer withheld over $5K making it a total of $11,298.98 in Social Security tax withheld.

A quick Googling shows that the maximum for the calendar year is ~$7,200.

How do we recoup the $4K? Do we get it back from the government in our income tax filing for 2014, or do we have to try and get it from the employer?

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This is a common occurrence when somebody has multiple jobs in one year. The employer can't know if you have reached the annual limit. They know to stop when you have hit the maximum for their company, but don't have information on the other jobs. In fact the IRS doesn't let them factor in the other jobs. They have to keep making their payment until you hit the max for their company.

When you fill out the 1040 there will be a line that checks that the total social security amount for each person was not over the annual limit. The extra will be refunded when you file your taxes.

In the future if this happens again you can adjust your withholding to minimize the overage. For the example given in the question to get the 4K extra sooner, increase the number of allowances on the W-4.

  • One extra exemption in 2014 was $3950.
  • Assuming the 25% tax bracket.
  • The exemption is worth 3950*0.25 or $987.50
  • assuming 26 paycheck a year (bi-weekly)
  • each allowance reduces your withholding by $37.98
  • bump the number of allowances by 3 for the last 5 months of the year and get $1139 back early.

You can under withhold federal income tax because you will over withhold social security tax.

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  • For 2014 it's line 71 of Form 1040. As to your last comment, how do you adjust withholding of social security taxes? As far as I know, Form W-4 only applies to income tax withholding. – Nate Eldredge Feb 23 '15 at 1:41
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    Thanks for the edit. I understand now, since you claim your excess social security tax refund on your income tax return, it goes to pay your income tax liability first, so in the end you have still made sufficient income tax payments to avoid penalties. – Nate Eldredge Feb 23 '15 at 5:58

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