FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Daniel earns wages of $86,000 in 2023. What are the total employment taxes paid on the
wages?
Total employment taxes $
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Step 1: Introduction:
Social Security Tax:
- For 2023, the Social Security tax rate is 12.4% on wages up to a certain limit, which is known as the Social Security Wage Base.
- The Social Security Wage Base for 2023 is $147,000.
Medicare Tax:
- The Medicare tax rate is 2.9% on all wages with no income limit.
- However, for high-income earners, there is an additional Medicare tax of 0.9% on wages over $200,000 for single filers and $250,000 for married couples filing jointly.
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