Question

In 2008, the Social Security tax percentage was 6.2% for the first $102,000 earned. The Medicare tax percentage was 1.45% of your entire salary. Darby made $143,000 in 2008. How much did Darby pay in Social Security and Medicare taxes that year?​

Answer 1

First, we need to calculate the Social Security tax that Darby paid. Since the Social Security tax percentage was 6.2% for the first $102,000 earned, the maximum amount of Social Security tax that Darby would owe is:

0.062 x $102,000 = $6,324

However, since Darby earned $143,000, which is more than the maximum taxable earnings of $102,000, he only paid Social Security tax on the first $102,000 of his earnings. Therefore, the amount of Social Security tax that Darby paid is:

0.062 x $102,000 = $6,324

Next, we need to calculate the Medicare tax that Darby paid. Since the Medicare tax percentage was 1.45% of his entire salary of $143,000, the amount of Medicare tax that Darby paid is:

0.0145 x $143,000 = $2,073.50

Therefore, Darby paid a total of:

$6,324 + $2,073.50 = $8,397.50

in Social Security and Medicare taxes in 2008.