How do I get less FICA tax taken out of my paycheck?

The percentage of income for FICA tax that workers pay is determined by federal law and is the same for everyone. The only way to pay less FICA tax (as a dollar amount, not a percentage of pay) is to earn less income. FICA stands for Federal Insurance Contributions Act. FICA consists of two separate payroll taxes: Social Security (6.2% of pay) and Medicare (1.45% of pay), for a total of 7.65% of pay.

FICA tax is paid by workers and their employers. In the case of self-employed workers and independent contractors, they pay 15.3% tax as self-employment taxes on Schedule SE that is filed with their tax return. However, they also get to deduct 50% of what they pay in self-employment tax as an income tax deduction on IRS Form 1040 (see IRS Pub 334).

Almost all employed and self-employed workers are covered by Social Security and are expected to pay FICA tax or self-employment taxes. The major exceptions are most civilian federal government employees hired before 1984 (they are covered by, and pay the 1.45% tax for, Medicare but not for Social Security retirement benefits) and about 25% of state and local government employees with a pension plan. Some other exceptions apply to ministers and members of religious orders and certain college students who work at on-campus jobs.

For additional information about FICA tax exemptions, check www.socialsecurity.gov.