Sonny Siebert earned $485,000 a year as a rookie pitcher for the Cleveland Indians. Assuming a tax rate of 6.2% for Social Security up to $128,400 and Medicare tax of 1.45%, how much did Sonny pay in FICA taxes as a rookie pitcher? (Round your answer to th
Sonny Siebert earned $485,000 a year as a rookie pitcher for the Cleveland Indians. Assuming a tax rate of 6.2% for Social Security up to $128,400 and Medicare tax of 1.45%, how much did Sonny pay in FICA taxes as a rookie pitcher? (Round your answer to th
Chapter1: Federal Income Taxation—an Overview
Section: Chapter Questions
Problem 44P
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Question
Sonny Siebert earned $485,000 a year as a rookie pitcher for the Cleveland Indians. Assuming a tax rate of 6.2% for Social Security up to $128,400 and Medicare tax of 1.45%, how much did Sonny pay in FICA taxes as a rookie pitcher? (Round your answer to the nearest cent.)
Expert Solution
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Step 1
In the United States, FICA is a federal payroll tax. It stands for the Federal Insurance Act and is deducted from each paycheck. Your 9 number assists Social Security in accurately recording your covered wages or self-employment. As you work and pay FICA taxes, you accumulate credits for Social Security benefits.
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