Question

In 2022, Aretha receives a salary advance against 2023 wages. Which year's wage base is used to calculate SS tax on the advance?

a) 2022
b) 2023
c) Average of 2022 and 2023
d) Lowest of 2022 and 2023

Answer 1

The wage base used to calculate the Social Security tax on the salary advance is based on the year in which the advance is received.

Step-by-step explanation:

The year's wage base used to calculate the Social Security (SS) tax on the salary advance depends on the year in which the advance is received. In this case, since Aretha receives a salary advance against 2023 wages in 2022, the wage base of 2022 would be used to calculate the SS tax on the advance.