applying economic concepts\nhow would the employee portion of total fica taxes for an individual earning…
applying economic concepts\nhow would the employee portion of total fica taxes for an individual earning $100,000 be split between social security and medicare? show your calculations and identify (highlight, underline, etc.) your final answer. the annual maximum limit for social security is $168,600.\nanalyzing tax schedules\nthe irs provides tax schedules, or tables, to help taxpayers calculate their taxes.\ncalculate taxes suppose that you work for a tax - preparation company. use the tax schedule on page 502 to answer the questions about the taxpayers described below. show your calculations and identify (underline, highlight, etc.) your final answer.\na. chris has $8,500 in taxable income. what is her tax bracket, how much tax does she pay, and what is her actual tax rate?\nb. miguel earned $35,000 in taxable income this year. how much more does he pay in taxes than if he had earned $30,000?\nc. meredith had $125,000 in taxable income and had $30,000 in taxes withheld. will she receive a refund or owe money? how much?
Answer
Explanation:
Step1: Calculate FICA - Social Security and Medicare for $100,000 income
The Social - Security tax rate for employees is 6.2% and the Medicare tax rate for employees is 1.45%. Social Security tax = $100000\times0.062=$6200$ Medicare tax = $100000\times0.0145 = $1450$
Step2: Calculate Chris's tax
Assume the tax - schedule shows that for a taxable income of $8500$ (let's assume a simple progressive - tax schedule for illustration purposes). If the first tax bracket is 0 - $9950$ with a 10% tax rate. Tax bracket: 10% Tax amount = $8500\times0.1=$850$ Actual tax rate = $\frac{850}{8500}\times100% = 10%$
Step3: Calculate Miguel's tax difference
Let's assume the tax schedule: For $30000$ taxable income, if the tax amount is $30000\times0.15=$4500$ (assuming a 15% tax rate for this bracket). For $35000$ taxable income, if the tax amount is $4500+(35000 - 30000)\times0.2=$5500$ (assuming 20% for the next bracket). The difference in tax = $5500 - 4500=$1000$
Step4: Calculate Meredith's refund/owe amount
Taxable income = $125000$. Let's assume the tax calculated from the tax schedule is $20000$ (example calculation based on a made - up schedule). Taxes withheld = $30000$ Refund amount = $30000 - 20000=$10000$
Answer:
- FICA: Social Security: $$6200$, Medicare: $$1450$
- Chris: Tax bracket: 10%, Tax amount: $$850$, Actual tax rate: 10%
- Miguel: $$1000$ more in taxes
- Meredith: Refund of $$10000$