Question

In 2000, Jose Gonzalez earned $54,700 as a self-employed worker. He also earned $40,150 as an employee. How much FICA tax did he pay for both earnings? Note: Self-employed tax rate is 15.3% and the employee tax rate is 7.65%.$10,992.75$11,025.50$11,155.90$11,440.58None of these choices are correct.

Answer 1

Answer:

$11,440.58

Explanation:

Amount earned as a self-employed worker = $54,700

Self-employed tax rate = 15.3%

Amount earned as an employee = $40,150

The employee tax rate = 7.65%.

$Total\; \text{Tax Paid=(}15.3\%\times54700)+(7.65\%\times40150)$

We solve for our result:

$\begin{gathered} Total\; \text{Tax Paid=(}\frac{15.3}{100}\times54700)+(\frac{7.65}{100}\times40150) \\ =\text{(}0.153\times54700)+(0.0765\times40150) \\ =8369.1+3071.48 \\ =11440.58 \end{gathered}$

The total FICA tax he paid for both earnings is $11,440.58.