Question

In 2014, Lee began working as a nurse anesthetist with a taxable income of $135,000. The Medicare tax was 1.45%, and the Social Security tax rate was 6.2% to the maximum income of $117,000 that year. How much did Lee pay in FICA taxes in 2008?

Answer 1

Lee's FICA taxes for 2014 include Social Security taxes on his income up to the limit of $117,000 and Medicare taxes on his entire income, totaling $9,211.50.

Step-by-step explanation:

The calculation of FICA taxes for Lee in 2014 is based on the rates for Medicare tax and Social Security tax. The Social Security tax is applied at 6.2% of the gross income up to the maximum income limit of $117,000, producing a taxation amount of $7,254 (6.2% of $117,000). The Medicare tax has no income ceiling; therefore, it is calculated as 1.45% of the entire $135,000 income, resulting in a tax amount of $1,957.50 (1.45% of $135,000). To get the total FICA tax payment, we add the Social Security and Medicare taxes together, which amounts to $9,211.50.