use the 2021 fica tax rates, shown, to answer the following question. if a taxpayer is self - employed and…

use the 2021 fica tax rates, shown, to answer the following question. if a taxpayer is self - employed and earns $157,000, what are the taxpayers fica taxes? employees rates: 7.65% on first $142,800 of income; 1.45% of income in excess of $142,800. matching rates paid by the employer: 7.65% on first $142,800 paid in wages; 1.45% of wages paid in excess of $142,800. self - employed rates: 15.3% on first $142,800 of net profits; 2.9% of net profits in excess of $142,800. the fica taxes are $ (round to the nearest cent as needed.)

use the 2021 fica tax rates, shown, to answer the following question. if a taxpayer is self - employed and earns $157,000, what are the taxpayers fica taxes? employees rates: 7.65% on first $142,800 of income; 1.45% of income in excess of $142,800. matching rates paid by the employer: 7.65% on first $142,800 paid in wages; 1.45% of wages paid in excess of $142,800. self - employed rates: 15.3% on first $142,800 of net profits; 2.9% of net profits in excess of $142,800. the fica taxes are $ (round to the nearest cent as needed.)

Answer

Explanation:

Step1: Calculate tax on first $142,800

The self - employed rate on the first $142,800 of net profits is 15.3%. So the tax amount is $142800\times0.153 = 21848.4$.

Step2: Calculate the amount of income in excess

The taxpayer's income is $157000$. The amount in excess of $142800$ is $157000 - 142800=14200$.

Step3: Calculate tax on the excess amount

The self - employed rate on net profits in excess of $142800$ is 2.9%. So the tax on the excess amount is $14200\times0.029 = 411.8$.

Step4: Calculate total FICA taxes

Add the tax on the first $142800$ and the tax on the excess amount. The total FICA taxes are $21848.4+411.8 = 22260.2$.

Answer:

$22260.20$