Question

One possible solution to a diminishing Social Security payroll is to increase the Social Security tax by 1.89%. How would such an increase effect the tax on an annual salary of $54,000?

Answer 1

Answer:

Annual tax  increase by $1,020.60.

Explanation:

As the Social Security payroll is increases the Social Security tax, So, it will lead to increase the annual tax and it is computed as:

Increase in Annual Tax = Salary × Increase in Social Security tax

Where,

Salary amounts to $54,000

Increase in Social Security Tax by 1.89%

Putting the values above:

= $54,000 × 1.89%

= $1,020.60