determine the total annual fica tax for an annual salary of $165,000. use $106,800 for maximum taxable…

Explanation:

Step1: Identify FICA - tax rate

The FICA - tax rate is composed of Social Security tax rate (6.2%) and Medicare tax rate (1.45%). So the total FICA - tax rate is 6.2%+1.45% = 7.65%.

Step2: Calculate the FICA tax

Since the maximum taxable earnings is $106,800, we calculate the FICA tax on this amount. The formula for calculating the tax is $Tax = Tax\ rate\times Taxable\ earnings$. So, $Tax=0.0765\times106800$. $Tax = 8170.2$ (Social - Security part on $106800$) + $0.0145\times165000$ (Medicare part on the whole salary as there is no limit for Medicare tax) The Social - Security tax is $0.062\times106800 = 6621.6$. The Medicare tax is $0.0145\times165000=2392.5$. The total FICA tax is $6621.6 + 2392.5=9014.1$.

Answer:

B. $9,014.10$