Daniel earns wages of $86,000 in 2023. What are the total employment taxes paid on thewages?Total employment taxes $

Social Security Tax:For 2023, the Social Security tax rate is 12.4% on wages up to a certain limit,…

Answered: Daniel earns wages of $86,000 in 2023.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Daniel earns wages of $86,000 in 2023. What are the total employment taxes paid on the
wages?
Total employment taxes $

Expert Solution

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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