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Jane's cumulative earnings year to date are $45,000, and her gross pay for this week is $500. Assuming the upper limit on FICA-Social Security is $118,500, what are her FICA-Social Security and FICA-Medicare taxes for the week, respectively?

User NCA
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Final answer:

Jane's FICA-Social Security tax is $31 and her FICA-Medicare tax is $7.25 for the week, calculated using rates of 6.2% and 1.45% respectively on her gross pay of $500.

Step-by-step explanation:

To calculate Jane's FICA-Social Security and FICA-Medicare taxes for the week, we need to use the respective rates and consider the wage limit for Social Security tax.

Since Jane's cumulative earnings are $45,000, she is below the Social Security wage limit of $118,500.

Therefore, her Social Security tax for the week on her gross pay of $500 is calculated at a rate of 6.2%, which is half of the total 12.4% (the other half is paid by the employer).

FICA-Social Security tax calculation:

500 x 0.062 = $31

The FICA-Medicare tax rate is 1.45%, with no upper earnings limit. Thus, the tax is:

FICA-Medicare tax calculation:

500 x 0.0145 = $7.25

Therefore, Jane's FICA-Social Security tax for the week is $31, and her FICA-Medicare tax for the week is $7.25.

User Sushant Mehta
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