Eva received $73,000 in compensation payments from JAZZ Corp. during 2019. Eva incurred $16,000 in business expenses relating to her work for JAZZ Corp. JAZZ did not reimburse Eva for any of these expenses. Eva is single and she deducts a standard deduction of $12,200. Based on these facts answer the following questions:  Use Tax Rate Schedule for reference.a. Assume that Eva is considered to be an employee. What amount of FICA taxes is she required to pay for the year? (Round your final answer to the nearest whole dollar amount.)Amount of FICA taxes?

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Asked Nov 22, 2019
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Eva received $73,000 in compensation payments from JAZZ Corp. during 2019. Eva incurred $16,000 in business expenses relating to her work for JAZZ Corp. JAZZ did not reimburse Eva for any of these expenses. Eva is single and she deducts a standard deduction of $12,200. Based on these facts answer the following questions:  Use Tax Rate Schedule for reference.

a. Assume that Eva is considered to be an employee. What amount of FICA taxes is she required to pay for the year? (Round your final answer to the nearest whole dollar amount.)

Amount of FICA taxes?

 

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Step 1

FICA tax: Federal government imposes taxes on the employee’s pay to provide benefits to retired, old age, orphans and disabled. This tax is also referred to as a social security tax because the program is devised to benefit the society.

Step 2

Compute FICA tax.

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Step 1: Compute the social security Social security tax $73,000 x 6.2% S4,526.00 Step 2: Compute the Medicare tax. Medicare tax $73, 000 x 1 .45% $1,058.50 Step 3: Compute the amount of FICA FICA tax (Social Security tax +Medicare tax) $4,526.00+ $1,058.50 =$5,584.50

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