Question

In 2010, the government took out 6.2% of earnings for Social Security to a maximum taxable income of $106,800. For Medicare, 1.45% of earnings was paid. How much money would someone have to have earned in 2010 so that their payments into Medicare were equal to their payments into Social Security?

Answer 1

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Answer:

$456,662

Explanation:

The amount paid to Social Security is a maximum of ...

6.2% × $106,800 = 6,621.60

If we want an equal amount paid to Medicare, we want ...

1.45% × earnings = $6,621.60

earnings = $6,621.60/0.0145 ≈ $456,662

Someone would have to earn $456,662 so that their Social Security and Medicare payments were equal.