Question

One possible solution to a diminishing Social Security payroll is to increase the Social Security tax by 1.89%. How would such an increase effect the tax on an annual salary of $54,000?

Answer 1

Your answer would A if you are doing edge which is $1,020.60

Step-by-step explanation:

I got it right on the practice <3

Answer 2

Annual tax increase by $1,020.60.

Step-by-step explanation:

As the Social Security payroll is increases the Social Security tax, So, it will lead to increase the annual tax and it is computed as:

Increase in Annual Tax = Salary × Increase in Social Security tax

Where,

Salary amounts to $54,000

Increase in Social Security Tax by 1.89%

Putting the values above:

= $54,000 × 1.89%

= $1,020.60