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Social Security taxes are calculated on a base of:

A) $117,250

B) $118,750

C) $118,500

D) 6%

User Copyflake
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1 Answer

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Final answer:

The Social Security taxes for the year 2015 were calculated based on a wage base limit of $118,500, which is the correct answer, option C.

Step-by-step explanation:

Social Security taxes are calculated on a base wage limit that is adjusted each year for inflation. For the year 2015, the wage base limit for Social Security taxes was set at $118,500. This wage base limit refers to the maximum amount of earned income upon which a worker pays Social Security taxes at a rate of 12.4%, which is split evenly between the employer and the employee at 6.2% each.

Any earned income above this threshold is not subject to Social Security taxes. The Medicare tax, however, is assessed at 1.45% of gross income with no upper limit. Therefore, the correct answer to the student's question is C) $118,500.

User Netanel
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