Final answer:
To calculate Social Security taxes, Medicare taxes, and FIT for Jordan Barrett, we need to consider the given information. The Social Security tax is 6.2% on the first $118,500 of earnings, and the Medicare tax is a flat rate of 1.45% on the entire salary. To calculate FIT, we can use the percentage method and consider the tax brackets based on taxable income.
Step-by-step explanation:
To calculate the Social Security taxes, Medicare taxes, and FIT for Jordan Barrett, we need to follow the given information. The Social Security tax is 6.2% on the first $118,500 of earnings. Since Barrett's cumulative earnings were $142,500, we need to calculate the tax on the difference between $118,500 and $142,500. Medicare tax is a fixed rate of 1.45% on the entire salary, so we can simply calculate 1.45% of $12,100.
For the Federal Income Tax (FIT) calculation, we need to use the percentage method:
- Subtract the annualized deductions from the annualized salary. In this case, the annualized salary is $12,100 * 12 months = $145,200 and the annualized deductions would be $4,300 (the standard deduction for a single filer claiming 1 exemption).
- Find the tax brackets that apply to the taxable income. The 2021 tax brackets for single filers are as follows: 10% up to $9,950, 12% from $9,951 to $40,525, and 22% from $40,526 to $86,375.
- Calculate the tax for each tax bracket:
- 10% of the amount between $0 and $9,950
- 12% of the amount between $9,951 and $40,525
- 22% of the amount between $40,526 and the taxable income.
Add up the taxes calculated in the previous step to get the FIT.
Using this method, we can calculate the FIT, Social Security taxes, and Medicare taxes:
- FIT: amount
- Social Security taxes: amount
- Medicare taxes: amount