Question

Which of the following is an example of a tax authorized under the Federal Insurance Contributions Act (FICA)?

excise tax

Social Security tax

tariffs

gift tax

Answer 1

The answer to the above question is B: Social Security tax

Answer 2

The correct answer is Social Security tax.

Social Security tax is an example of a tax authorized under the Federal Insurance Contributions Act (FICA).

The Federal Insurance Contributions Act or FICA is a United States law. What this law does is create a payroll tax that requires the deduction from the paychecks of employees. This Federal Act also deducts a contribution from employers to fund two programs from the government: the Social Security and Medicare programs. What happen with people that are self-employed?. For them, there is a similar law, the Self-Employed Contributions Act or SECA.

That is why a Social Security tax is an example of a tax authorized under the Federal Insurance Contributions Act (FICA).