Question

in 2009, the maximum taxable income for social security was $102,000 and the rate was 6.2%. The rate for medicare tax was 1.45%. If Jessica's taxable income was $152,000 that year, how much did she pay in FICA taxes?

Answer 1

$5304

Explanation:

Since, the rate for medicare tax at that year was 1.45%, then Jessica's medicare tax amount 'x' should be:

`x = (102,000).(1.45)/(100)`

x = $1479

And since, the rate for security tax at that year was 6.2%, then Jessica's medicare tax amount 'y' should be:

`y = (152,000 - 102,000).(6.2)/(100)`

y = $3100

Hence, she paid total $3100 + $2204 = $5304 in FICA taxes.

Answer 2

Social security tax = (Earnings-Maximum taxable income) * rate = (152,000-102,000)*0.062 = 50,000*0.062 = $3,100

Medicare tax = Earnings*rate = 152,000*0.0145 = $2,204

Total FICA tax = 3100+2204 = $5,304