Calculate the Social Security (OASDI) tax and the Medicare tax that the followin

Question

Calculate the Social Security (OASDI) tax and the Medicare tax that the following people/household would need to pay in 2017. The maximum taxable earning in 2017 was $127,200. [5 pts. each] Bill is a physician and owns a clinic with two other physicians. Bill makes a salary of $260,00o in 2017. Bill files single tax return. Bassel works for a law firm and makes $190,000 in 2017 in salary. He also collects net profit of s5o,o0o from renting out properties in 2017. Bassel files single tax return and owns a real-estate company that rents out properties. Jasmine owns a flower shop and makes sio0,ooo in 2017 in wage/profit income Her husband works for an architecture firm and makes s80,o0o in 2017 in wage income. Jasmine and her husband file joint tax returns. Find the joint OASDI tax and Medicare tax Jasmine and her husband will need to pay a. b. c.

Explanation / Answer

Answer (a)

1. Social Security Tax in 2017 is 6.2% Employee Portion on Maximum base amt of $127200.

2. Medicare Tax in 2017 is 1.45% Employee Contribution on maximum base amt of $200000

3. Medicare Additional amt of 0.9% (1.45% +.9%) for Over and above salary of $ 200000 for Single Return

Total Earning is $260000

1. Social Security Tax is 6.2% of $127200 = $7886.4

2. Medicare 1.45% of 260000 = $3770

3. Additional Medicare 2.35% (.9%+1.45%) on $60000 = $1410

Total Tax = $13066.4 ($7886.4 +$3770 +$1410)

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