Question

5 Landon, single, has already earned $215,000 this calendar year. This pay period he earned $4,300. How much of the $4,300 is taxed for $$ Tax $$ withheld > Social Security (OASDI)? - Medicare (MC)? 0.00 0.00 6 You just worked your first week and earned $800. How much of the $800 is taxed for $$ Tax $$ withheld > Social Security (OASDI)? Medicare (MC)? 0.00 0.00

Help with 5 and 6 please

Answer 1

Social Security and Medicare are deducted from employee's earnings and the same amount is contributed by employer. We assume the year in the question is 2019. As of 2019, Social security tax is 6.2% and 1.45% is Medicare tax withheld from employee's earnings. For 2019, these taxes are taken from the income at a maximum limit of $132,900. Any amount earned above $132,900 is not subject to Social Security or Medicare.

5. Landon, has already earned $215,000 this calendar year. Tax will only be applied to the amount $132,900. Hence, Landon will pay 6.2% of $132,900 i.e. $8,239.8 as Social Security tax and 1.45% of $132,900 i.e. $1,927.05 as Medicare tax.
Landon's effective social security tax rate should be $8,239.8/$215,000 = 3.83%

Landon's effective Medicare tax rate should be $1,927.05/$215,000 = 0.90%

Hence, Social security tax withheld for the earning $4,300 = 3.83% of $4,300 = $164.69

Medicare tax wothhelfor the earning $4,300 = 0.90% of $4,300 = $38.7

6. $800 is taxed 6.2% for Social Security Tax and 1.45% for Medicare as it is the only income.

Social Security Tax withheld = 6.2% of $800 = $49.6

Medicare Tax withheld = 1.45% of $800 = $11.6