Final answer:
Kyle owes $10,710 in self-employment tax for his freelance work and $5,421 in FICA taxes for his salaried position, totaling $16,131 in FICA taxes for the year.
Step-by-step explanation:
Kyle, a single taxpayer, has two sources of income for the year: self-employment income as a freelance software engineer, and salary as a full-time employee at Hoogle Incorporated.
To calculate the FICA taxes owed, we must consider both the self-employment tax and the employment-related tax contributions.
As a self-employed individual, Kyle has to pay both the employer and employee portions of Social Security and Medicare taxes. The self-employment tax rate is 15.3%, composed of 12.4% for Social Security up to an income cap (which is often annually adjusted; here we're using the rate applying to the first $113,000 of income) and 2.9% for Medicare with no cap.
Since his self-employment income is $70,000, he would owe $70,000 × 0.153 = $10,710 before any deductions.
For his salaried position earning $190,000, Kyle will have 6.2% deducted for Social Security tax on the first $113,000 and 1.45% for Medicare on the entire amount.
However, since he will have already paid the equivalent of the Social Security tax on his self-employment income, he will only owe the Social Security tax on the remaining difference up to the cap ($113,000 - $70,000 = $43,000), and the full Medicare tax on the entire $190,000.
The calculations are as follows:
Social Security Tax = $43,000 × 0.062
= $2,666 and
Medicare Tax = $190,000 × 0.0145
= $2,755.
Thus, the total FICA tax from his salaried income is $2,666 + $2,755 = $5,421.
Summing the self-employment tax and the taxes from his salaried position, Kyle's total FICA tax liability for the year is $10,710 + $5,421 = $16,131.