Question

In 2009, Gizelle had two jobs. She earned $75,220 working the first 8 months of the year at a nursing home. She switched jobs in September and began to work in a hospital, where she earned $41,211. In 2009, the maximum taxable income for Social Security was $106,800. The Social Security tax rate was 6.2%. How much OASDI tax did Giselle overpay?

Answer 1

$597.12

Explanation:

On her wages at her first job, Gizelle paid ...

6.2% × $75,220 = $4663.64

On her wages at her second job, Gizelle paid ...

6.2% × $41,211 = $2555.08

Thus the total OASDI tax Gizelle paid was ...

$4663.64 +2555.08 = $7218.72

__

The total amount of tax due is no more than ...

6.2% × $106,800 = $6621.60

So, the amount she overpaid was ...

amount paid - amount due = amount overpaid

$7218.72 -6621.60 = $597.12

Gizelle overpaid $597.12 her OASDI tax.