Question

Kelly received a $60,000 salary during 2017. Her federal income tax withholding rate was 20%, and the Social Security base amount for 2017 was $118,500.What is the total amount that her employer should have withheld in 2017?
A. $15,390
B. $16,590
C. $15,979
D. $6,849

Answer 1

Answer: B. $16,590

Explanation:

The FICA tax rate which is the combined Social Security and Medicare rate for 2017 was 7.65%.

Assuming a base of $118,500 this means that you are taxed on your first $118,500 in earnings.

Kelly only made $60,000 so the tax rate will apply to her $60,000.

Adding that to the 20% that she is due to pay on Federal Income tax the total amount her employer withheld was,

= (60,000 * 20%) + (60,000 * 7.65%)

= 12,000 + 4,590

= $16,590

Option B is correct.