Question

Brooke, a single taxpayer, works for Company A for all of 2020, earning a salary of $50,000.

b. Assume Brooke works for Company A for half of 2020, earning $50,000 in salary, and she works for Company B for the second half of 2020, earning $90,000 in salary. What is Brooke’s FICA tax obligation for the year? (Round your intermediate calculations to the nearest whole dollar amount.)

FICA Tax Obligation ______________________

Answer 1

Brooke, a single taxpayer, works for Company A for all of 2020, earning a salary of $50,000.

social security [email protected]% = $3100 (employee contribution)(salary $50,000*6.2%)

medicare tax @1.45% =$725 ((employee contribution)(salary $50,000*1.45%)

brooke tax obligation is =$3825.

w.n1 : (for employer contribution )

social security [email protected]% = $3100(employer contribution)(salary $50,000*6.2%)

medicare tax @1.45% = $725  (employer contribution)(salary $50,000*1.45%)

b. Assume Brooke works for Company A for half of 2020, earning $50,000 in salary, and she works for Company B for the second half of 2020, earning $90,000 in salary. What is Brooke’s FICA tax obligation for the year?

social security [email protected]% = $ 8,537.4 (employee contribution)($137700*6.2%)

medicare tax @1.45% =$2030 (employee contribution)(140,000*1.45%)

brooke fica tax obligation will be $10,567.

w.n 2 (for employer contribution )

social security [email protected]%= $8,537.4 (employer contribution)($137700*6.2%)

medicare tax @1.45% =$2030 (employee contribution)(140000*1.45%)

additional knowledge:

1)social security tax withhold limit is upto $137,700 for 2020

2) second half is paid by employer & gets a deduction for their half on their corporate tax return.