Question

Brooke, a single taxpayer, works for Company A for all of 2022, earning a salary of $50,000. What is her FICA tax obligation for the year? Assume Brooke works for Company A for half of 2022, earning $50,000 in salary, and she works for Company B for the second half of 2022, earning $100,000 in salary. What is Brooke's FICA tax obligation for the year?

Answer 1

Brooke's FICA tax obligation for the year depends on the salary earned and the Social Security and Medicare tax rates. For the given scenarios, her taxes would be $3,875 and $11,675 respectively.

Step-by-step explanation:

Brooke's FICA tax obligation for the year can be calculated using the Social Security and Medicare tax rates. As of 2022, the Social Security tax rate is 6.2% on wages up to $142,800 and the Medicare tax rate is 1.45% on all wages.

For the first scenario where Brooke only works for Company A and earns a salary of $50,000, her FICA tax obligation would be:

(50,000 * 6.2%) + (50,000 * 1.45%) = $3,875

In the second scenario where Brooke works for Company A for half of 2022 with a $50,000 salary, and works for Company B for the second half of 2022 with a $100,000 salary, her FICA tax obligation would be:

(50,000 * 6.2%) + (50,000 * 1.45%) + (100,000 * 6.2%) + (100,000 * 1.45%) = $11,675