Use the 2016 FICA tax rates in table 8.2 on page 509

Q 20 : If you are not self-employed and earn $140,000 what are your FICA taxes?

Q 26 : You decide to work part-time at a local veterinary hospital. The job pays $14.50 per hour and you work 20 hours per week. Your employer withholds 10% of your gross pay for federal taxes, 7.65% for FICA taxes, and 5% for state taxes.

$1500: theft loss $300: cost of tax preparation Tax credit: none. Calculate FICA taxes. Blitzer Bonus Social Security and Medicare (FICA) In addition to income tax, we are required to pay the federal government FICA (Federal Insurance Contributions Act) taxes that are used for Social Security and Medicare benefits. Social Security provides payments to eligible retirees, people with health problems, eligible dependents of deceased persons, and disabled citizens. Medicare provides health care coverage mostly to Americans 65 and older. The 2016 FICA tax rates are given in Table 8.2. Percents and Tax Rates TABLE 8.2 2016 FICA Tax Rates Matching Rates Paid by Employee's Rates the Employer 7.65% on first $118.500 . 7.65% on first $118.500 of income paid in wages 1.45% of income in 1.45% of wages paid in excess of $118,500 excess of $118,500 Self-Employed Rates 15.3% on first $118,500 of net profits 2.9% of net profits in excess of $118,500 Taxpayers are not permitted to subtract adjustments, exemptions, or deductions when determining FICA taxes. In 1944 and 1945, the highest marginal tax rate in the United States was a staggering 94%. The tax rate on the highest-income Americans remained at approximately 90% throughout the 1950s, decreased to 70% in the 1960s and 1970s, and to 50% in the EXAMPLE 3 Computing FICA Tax If you are not self-employed and earn $150,000, what are your FICA taxes? SOLUTION The tax rates are 7.65% on the first $118,500 of income and 1.45% on income 1000 bofo b i in ay of $119 500