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Questions About Payroll (W2 Only)

Q. What is the Social Security and Medicare Limit for 2008?

Social Security has a limit for 2008 is $102,000. Medicare does not have any limits. Please remember that cafeteria plan deductions are exempt from these limits, so you must subtract these deductions from your gross pay to arrive at your gross/taxable pay for Social Security.

Q. How do cafeteria plan and 401(k) deductions affect my taxes?

Both cafeteria plan deductions and 401(k) deductions are taken pre-tax, however the taxes they affect may differ. 401(k) deductions are only exempt from federal and state withholding taxes. Cafeteria plan deductions are exempt from both federal and state withholding and from both Social Security and Medicare taxes.

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