Question

Calculate Social Security taxes, Medicare taxes, and FIT for Jordon Barrett. He earns a monthly salary of $13,400. He is single and claims 1 deduction. Before this payroll, Barrett’s cumulative earnings were $128,120. (Social Security maximum is 6.2% on $128,400 and Medicare is 1.45%.) Calculate FIT by the percentage method.

Answer 1

Explanation:

From the given information:

Social security taxes can be calculated as:

$128,400 - $128,120

= $280

Also, we know that the current monthly salary = $13, 400

So, social security tax is withheld by $280

This implies that:

Social security taxes = 280 × 0.062

= $17.36

The medical care taxes will now be:

= $13,400 × 1.45%

= $194.30

Using the percentage method to calculate the federal income tax; we have:

Use the tax bracket from 2017, marginal tax rate = 28%

∴

federal income tax = $13400 × 0.028

federal income tax = $3752