Question

For each of the following wages, determine the Social Security tax that would be withheld. Use $106,800 for maximum taxable earnings.

i. $23,660
ii. $89,000
iii. $166,090
a.
i. $146.69
ii. $551.80
iii. $1,029.76
b.
i. $1,466.92
ii. $5,518.00
iii. $10,297.58
c.
i. $146.69
ii. $551.80
iii. $662.16
d.
i. $1,466.92
ii. $5,518.00
iii. $6,621.60

Answer 1

Option D is the right choice.

Explanation:

The current Social Security tax is 6.2%

Given maximum taxable earnings = $106800. This means the social security tax will be calculated on a maximum amount of $106800.

Social security tax on $23660 =
`0.062*23660=1466.92`

Social security tax on $89000 =
`0.062*89000=5518`

Social security tax on $106800 (maximum earnings) =
`0.062*106800=6621.60`

So, these values fall under option D. Hence, option D is the right choice.