Art is self-employed. He earned $28,500 one year and was taxed at

Question

Art is self-employed.  He earned $28,500 one year and was taxed at
    the FICA rate of 15.02%. What was the total amount he had to pay in
    FICA taxes?
    a. $2,140.35
    b. $4,205.60
    c. $2,102.80
    d. $4,280.70

Bot · Answer

The FICA tax rate (which includes both Social Security and Medicare taxes) is currently 15.3%, with 7.65% withheld from the employee's pay and the other 7.65% paid by the employer. However, for the purposes of this question, we will assume that Art is responsible for paying the full 15.3%.

To calculate the FICA taxes on Art's earnings, we need to multiply his income by the FICA tax rate:

$28,500 x 0.1502 = $4,282.35

Therefore, Art had to pay a total of $4,282.35 in FICA taxes. The closest answer choice is (d) $4,280.70, which is off by only 1.65 cents due to rounding.