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Calculation of Social Security Tax and Marginal, Average and Effective Tax Rates on Social Security Taxes...

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Accounting

Calculation of Social Security Tax and Marginal, Average andEffective Tax Rates on Social Security Taxes (LO. 1)

Rory earns $70,000 per year as a college professor. Latesia is amarketing executive with a salary of $140,000. With respect to theSocial Security tax (OASDI: 6.2%; MHI: 1.45%) calculate thefollowing:

(Hint: OASDI 6.2% tax is only on max of$128,400 for the year.)

When required, round the total taxes to two decimalplaces.

a.

Rory's total FICA taxes:$
Latesia's total FICA taxes:$

Rounding instructions for parts (b), (c), and (d): Whenrequired, round the tax rates to two decimal places.

b.

Rory's marginal tax rate:%
Latesia's marginal tax rate:%

c.

Rory's average tax rate:%
Latesia's average tax rate:%

d.

Rory's effective tax rate:%
Latesia's effective tax rate:%

Answer & Explanation Solved by verified expert
3.9 Ratings (648 Votes)
a For the year 2018 the employees portion of the FICA tax is 765 the Social Security tax of 62 plus the Medicare tax of 145 on the first 128400 of an employees salary and wages On an employees salary andor    See Answer
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