Five Exemptions from Social Security Taxes

Although Social Security taxes keep on going up, there are many payments that are not subject to Social Security taxes. Among them:

  1. Payments that are not compensation for services such as rents, dividends, interest, inheritances, and gifts.
  2. Company fringe benefit payments such as premiums for health and accident insurance and certain qualified educational benefits
  3. Wages paid to your under-age-18 children if you are self employed. (Wages paid by a corporation are subject to Social Security taxes.)
  4. The cash value of meals and lodging which is made by an employer for the employer’s convenience.
  5. Company loans to a stockholder or an employee when the loan is fully documented to show that it is a legitimate loan which will be repaid.