Question

tim mogilnitsky is a self - employed researcher. he pays fica at a rate of 12.4% and medicare at a rate of 2.9%. find the dollar amount of these taxes on the annual adjusted earnings of $36,676.14. tims fica tax is $4547.84. (round to the nearest cent.) tims medicare tax is $\square$. (round to the nearest cent.)

Explanation:

Step1: Identify the formula for tax calculation

To find the Medicare tax, we use the formula: Tax = Earnings × Tax Rate. Here, the earnings are $36,676.14 and the Medicare tax rate is 2.9% or 0.029 in decimal form.

Step2: Calculate the Medicare tax

Multiply the annual adjusted earnings by the Medicare tax rate. So, we have \( 36676.14\times0.029 \).
First, calculate \( 36676.14\times0.029 \):
\( 36676.14\times0.029 = 36676.14\times\frac{29}{1000}=\frac{36676.14\times29}{1000} \)
\( 36676.14\times29 = 36676.14\times(30 - 1)=36676.14\times30-36676.14\times1 = 1100284.2 - 36676.14 = 1063608.06 \)
Then, divide by 1000: \( \frac{1063608.06}{1000}=1063.60806 \)
Rounding to the nearest cent (two decimal places), we get $1063.61.

Answer:

\( \$1063.61 \)