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 $45,915.95. tims fica tax is $\square. (round to the nearest cent.) tims medicare tax is $\square. (round to the nearest cent.)

Explanation:

Step1: Calculate FICA tax

To find the FICA tax, we multiply the annual adjusted earnings by the FICA rate. The formula is: \( \text{FICA tax} = \text{Annual adjusted earnings} \times \text{FICA rate} \)
Given annual adjusted earnings = \$45,915.95 and FICA rate = 12.4% = 0.124
So, \( \text{FICA tax} = 45915.95 \times 0.124 \)
\( 45915.95 \times 0.124 = 5693.5778 \approx 5693.58 \) (rounded to the nearest cent)

Step2: Calculate Medicare tax

To find the Medicare tax, we multiply the annual adjusted earnings by the Medicare rate. The formula is: \( \text{Medicare tax} = \text{Annual adjusted earnings} \times \text{Medicare rate} \)
Given annual adjusted earnings = \$45,915.95 and Medicare rate = 2.9% = 0.029
So, \( \text{Medicare tax} = 45915.95 \times 0.029 \)
\( 45915.95 \times 0.029 = 1331.56255 \approx 1331.56 \) (rounded to the nearest cent)

Answer:

Tim's FICA tax is \$5693.58.
Tim's Medicare tax is \$1331.56.