If a taxpayer is not self-employed and earns $127,000, what are the taxpayer's FICA taxes?

Question

Matching Rates Paid by the
Employee's Rates
Employer
Self-Employed Rates
7.65% on first $142,800 of
7.65% on first $142,800 paid
15.3% on first $142,800 of net
income
in wages
profits
1.45% of income in excess of $142,800
1.45% of wages paid in excess of $142,800
2.9% of net profits in excess of $142,800
The taxpayer's FICA taxes are

Answer 1

FICA taxes consist of Social Security and Medicare taxes. The rates are as follows:

• Social Security tax rate: 6.2% on the first $142,800 of income.
• Medicare tax rate: 1.45% on all income.

Given that the taxpayer earns $127,000 and is not self-employed, we can calculate the FICA taxes as follows:

1. Social Security Tax Calculation: \[ \text{Social Security Tax} = 127,000 \times 0.062 = 7,874 \]

2. Medicare Tax Calculation: \[ \text{Medicare Tax} = 127,000 \times 0.0145 = 1,836.50 \]

3. Total FICA Taxes: \[ \text{Total FICA Taxes} = \text{Social Security Tax} + \text{Medicare Tax} = 7,874 + 1,836.50 = 9,710.50 \]

Thus, the taxpayer's total FICA taxes are $9,710.50.