Use the 2012 FICA tax rates, shown below, to answer the following question If yo

Question

Use the 2012 FICA tax rates, shown below, to answer the following question If you are self-employed and earn $152,000, what are the FICA taxes? Employee's Rates 5 65% on first $110,000 Matching Rates Paid by the Employer 7.65% on first $1 10,000 paid 13.3% on first S110.000 of in wages 1.45% of wages paid in excess of $110,000 Self-Employed Rates of income net profits 2.9% of net profits in excess of $110,000 1.45% of income in excess of $110000 Your taxes are Type an integer or a decimal Round to the nearest cent as needed)

Explanation / Answer

FICA tax on self employed = [13.3% * $110000] + [2.9% * ($152000 - $110000)]

=  [13.3% * $110000] + [2.9% * 42000]

= 14630 + 1218

= 15848

So, the taxes are $15848 .

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