Employee's Rates Matching Rates Paid by the EmployerSelf-Employed Rates • 7.65% on first $118,500 of income • 1.45% on income above $118,500 • 7.65% on first $118,500 paid in wages • 1.45% on wages above $118,500 • 13.3% on first $118,500 of net earnings • 2.9% on earnings above $118,500 ¹FICA taxes include Social Security and Medicare. The Social Security tax applies to the first $118,500 of income, while the Medicare tax applies to all income. Suppose Malcolm has $87,800 of income from work and is self-employed. How much will Malcolm have to pay in FICA taxes?

Employee's Rates Matching Rates Paid by the EmployerSelf-Employed Rates • 7.65% on first $118,500 of income • 1.45% on income above $118,500 • 7.65% on first $118,500 paid in wages • 1.45% on wages above $118,500 • 13.3% on first $118,500 of net earnings • 2.9% on earnings above $118,500 ¹FICA taxes include Social Security and Medicare. The Social Security tax applies to the first $118,500 of income, while the Medicare tax applies to all income. Suppose Malcolm has $87,800 of income from work and is self-employed. How much will Malcolm have to pay in FICA taxes?

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter10: Liabilities: Current, Installment Notes, And Contingencies

Section: Chapter Questions

Problem 10.2BE

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