Asked by Christopher Wayne on Jul 09, 2024
Verified
Trey Morgan is an employee who is paid monthly.For the month of January of the current year,he earned a total of $4,538.The FICA tax for social security is 6.2% of the first $128,400 earned each calendar year,and the FICA tax rate for Medicare is 1.45% of all earnings for both the employee and the employer.The amount of federal income tax withheld from his earnings was $680.70.What is the total amount of taxes withheld from the Trey's earnings?
A) $1,375.02
B) $746.50
C) $962.06
D) $1,027.86
E) $680.70
FICA Tax
A federal tax in the United States that funds Social Security and Medicare, contributed by both employees and employers.
Tax Withheld
The portion of an employee's income that an employer sends directly to the government as a payment of income taxes.
Federal Income Tax
The tax levied by the Internal Revenue Service on the annual earnings of individuals, corporations, trusts, and other legal entities.
- Calculate the impact of FICA taxes on both employee and employer.
Verified Answer
ZK
Zybrea KnightJul 14, 2024
Final Answer :
D
Explanation :
To calculate the total amount of taxes withheld from Trey's earnings, we need to consider both the FICA taxes (Social Security and Medicare) and the federal income tax withheld. The FICA tax for Social Security is 6.2% of earnings, and for Medicare, it's 1.45% of all earnings. Social Security tax = $4,538 * 6.2% = $281.36Medicare tax = $4,538 * 1.45% = $65.80Federal income tax = $680.70Total taxes withheld = Social Security tax + Medicare tax + Federal income tax = $281.36 + $65.80 + $680.70 = $1,027.86
Learning Objectives
- Calculate the impact of FICA taxes on both employee and employer.