Question

Calculate the Social Security and Medicare tax that would be applied to an annual salary of $235,430. Use $106,800 for
maximum taxable earnings.
a. Social Security tax: $1,459.67, Medicare tax: $341.37
b. Social Security tax: $14,596.66, Medicare tax: $3,413.70
c. Social Security tax: $662.16, Medicare tax: $341.37
d. Social Security tax: $6,621.60, Medicare tax: $3,413.70

Answer 1

Answer:

D   Social Security tax: $6,621.60, Medicare tax: $3,413.70

Step-by-step explanation:

Answer 2

Following are the calculation to the Social Security and Medicare tax value:

• This Social Security tax is a percent to which both workers and employers must pay $6.2\%$ of employee wages, for a total of $12.4\%$.
• The state pension, which would be applied to a $\ 235,430$ annual wage with a maximum tax liability:

         $\to \ 106,800\ is\ 12.4\%\ of\ \ 106,800 = 0.124 \times \ 106,800 = \ 13,243.20$

• Its payroll tax for Medicare is $2.9\%$.
• This only applies to earned income, which includes salaries and tips from an employer.
• We are liable for $1.45\%$ of a tax, which would be immediately withheld from your paycheck. The other $1.45\%$ is paid by your company.
• This Medicare tax would be charged to a $\ 235,430$ annual salary with a maximum taxable income:

     $\to \ 106,800\ is\ 2.9\%\ of\ \ 106,800 = 0.029 \times \ 106,800 = \ 3,097.20$

Therefore, the final answer is "$13,243.20 and $3,097.20".

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