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For tax year 2022, what is the amount employers are required to withhold from an employee's gross pay for Social Security tax and Medicare tax?

A) Social Security: 6.2%, Medicare: 1.45%

B) Social Security: 12.4%, Medicare: 2.9%

C) Social Security: 4.2%, Medicare: 1.45%

D) Social Security: 8.0%, Medicare: 1.75%

User Bbunmp
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1 Answer

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Final answer:

For the tax year 2022, employers must withhold 6.2% for Social Security and 1.45% for Medicare from an employee's gross pay. The total taxes, including both the employer and employee shares, are 12.4% for Social Security and 2.9% for Medicare.

Step-by-step explanation:

For the tax year 2022, the amounts employers are required to withhold from an employee's gross pay for Social Security tax and Medicare tax are as follows: Social Security tax is 6.2% of the gross annual income while Medicare tax is 1.45% of the gross annual income. The correct answer to the question is A) Social Security: 6.2%, Medicare: 1.45%. It's important to note, though, that both of these taxes are split between the employer and the employee, each paying half. For Social Security, the total tax is 12.4%, but an employee only sees 6.2% deducted from their paycheck, with the employer contributing the other half. Similarly, for Medicare, the total tax is 2.9%, with the employee again paying 1.45% and the employer matching this amount.

If you are a member of the "gig economy" and receive a 1099 tax statement, then you are considered an independent contractor. Therefore, you must pay both the employee and employer side of the payroll tax, totaling 12.4% for Social Security and 2.9% for Medicare, on your own without employer contribution.

User Alicia Tang
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