Question

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Brooke, a single taxpayer, works for Company A for all of 2019, earning a salary of $73,000.

a. What is her FICA tax obligation for the year? (Round your final answer to the nearest whole number.)

FICA tax obligation:

b. Assume Brooke works for Company A for half of 2019, earning $73,000 in salary, and she works for Company B for the second half of 2019, earning $113,000 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

a)

Federal Insurance Contribution act of federal law requiring employers to withhold 3 different taxes from the wages of the employee. As per FICA required to withhold following taxes.

1. 6.2% social security tax.
2. 1.45 % medicare tax.
3. 0.9% medicare surtax when employee earn more than$200000.

Brooke woks for company A earned $73000 salary in 2019. Therefore company A required to withhold taxes from Brooke,

Social seurity tax is 6.2% of $73000= $4526

Medicare tax is 1.45% of $73000 = $1059

Medicare surtax = nil because employee earn not more than$200000.

TOTAL =$5585.

Also company A required to pay employers portion of theses two taxes i.e 6.2% social security tax &1.45 % medicare tax. as same the amount that withhold from employees Wages.

b)

If Brooke works for half of 2019 for company A and second half for company B and earning $73000 & $113000 respectively. Total earned $186000

In 2019 Brooke required required to pay social security tax @6.2% on wages, maximum earning that will subject SST is $ 132900, therefore Brooke must pay only on $ 132900 @ 6.2% = $ 8240.

Brookes entire wages is subject to 1.45% medicare tax is =$ 2697. But Medicare surtax is nil because employee earned not more than$200000.

Therefore Brookes FICA tax obligation for the year 2019 is $10937.