Question

Sonny Siebert earned $485,000 a year as a rookie pitcher for the Cleveland Indians. Assuming a tax rate of 6.2% for Social Security up to $118,500 and Medicare tax of 1.45%, how much did Sonny pay in FICA taxes as a rookie pitcher?

Answer 1

$14,379.50

Explanation:

Given that:

• Sonny Siebert Income: $485,000
• Social Security tax rate: 6.2% up to $118,500
• Medicare tax of 1.45%

As we know that, the Federal Insurance Contributions Act (FICA) is made up of two items, Social Security and Medicare taxes.

So

Social Security tax: $118,500*6.2% = $7347

Medicare tax: $485,000*1.45% = $732.5

=> the amount of FICA taxes as a rookie pitcher she needs to pay is:

= $7347 + $732.5

= $14,379.50

Answer 2

14379.50

Explanation:

If I remember correctly, the Medicare tax is taken on Gross Income. The question has already limited the base amount for Social Security.

Social Security: 118,500 * 6.2/100 = 7347

Medicare Tax: 485,000*1.45/100 = 7032.50 Add

Add 14379.50

Sonny paid 14370 in taxes for these 2 items.