Question

In 2000, Jose Gonzalez earned $54,700 as a self-employed worker. He also earned $40,150 as an employee. How much FICA tax did he pay for both earnings? Note: Self-employed tax rate is 15.3% and the employee tax rate is 7.65%.$10,992.75$11,025.50$11,155.90$11,440.58None of these choices are correct.

Answer 1

$11,440.58

Step-by-step explanation:

Amount earned as a self-employed worker = $54,700

Self-employed tax rate = 15.3%

Amount earned as an employee = $40,150

The employee tax rate = 7.65%.

`Total\; \text{Tax Paid=(}15.3\%*54700)+(7.65\%*40150)`

We solve for our result:

`\begin{gathered} Total\; \text{Tax Paid=(}(15.3)/(100)*54700)+((7.65)/(100)*40150) \\ =\text{(}0.153*54700)+(0.0765*40150) \\ =8369.1+3071.48 \\ =11440.58 \end{gathered}`

The total FICA tax he paid for both earnings is $11,440.58.