Question

Knowing that a 6.2% Social Security tax is applied to a maximum wage of $106,800, the maximum amount of Social Security tax that could ever be charged in a single year is:

Answer 1

D

Explanation:

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 =

Social security tax on $89000 =

Social security tax on $106800 (maximum earnings) =

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

Answer 2

Take 6.2% of 106,800

.062 × 106800=

$6,621.60