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 $32,018.04.
tims fica tax is $3970.24. (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 $32,018.04 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 $32,018.04 × 0.029.
First, calculate 32018.04 × 0.029:
32018.04 × 0.029 = 32018.04 × (29/1000) = (32018.04 × 29)/1000
32018.04 × 29 = 32018.04 × (30 - 1) = 32018.04×30 - 32018.04×1 = 960541.2 - 32018.04 = 928523.16
Then divide by 1000: 928523.16 / 1000 = 928.52316
Rounding to the nearest cent (two decimal places), we get 928.52.

Answer:

928.52