What will be the total deduction for social security and Medicare taxes on Juanita's next weekly paycheck of $720 if she has already earned $10,800 this year? Social Security tax is 6.2% of wages up to $106,800. Medicare tax is 1.45% of all wages.
Looks like it will be 7.35% of $720
What will be the total deduction for social security and medicare taxes on Juanita's next weekly paycheck of $720 if she has already earned $10,800 this year? Social Security tax is 6.2% of wages up to $106,800. Medicare tax is 1.45% of all wages.
To calculate the total deduction for social security and Medicare taxes on Juanita's next weekly paycheck, we need to follow these steps:
Step 1: Calculate the social security tax deduction.
- First, we need to determine the amount of wages Juanita has earned this year that are subject to social security tax.
- The social security tax only applies to wages up to a certain threshold, which is $106,800 for the year.
- Since Juanita has already earned $10,800 this year, we need to calculate how much more she can earn before reaching the threshold.
- To find this, we subtract Juanita's year-to-date earnings from the threshold: $106,800 - $10,800 = $96,000.
- Next, we need to calculate the social security tax deduction on her next paycheck. The social security tax rate is 6.2%.
- Multiply the remaining amount that can be taxed by the tax rate: $96,000 * 0.062 = $5,952.
Step 2: Calculate the Medicare tax deduction.
- The Medicare tax applies to all wages; there is no threshold.
- The Medicare tax rate is 1.45%.
- Multiply Juanita's next weekly paycheck by the Medicare tax rate: $720 * 0.0145 = $10.44.
Step 3: Calculate the total deduction.
- Add the social security tax deduction to the Medicare tax deduction:
$5,952 + $10.44 = $5,962.44.
Therefore, the total deduction for social security and Medicare taxes on Juanita's next weekly paycheck of $720 will be $5,962.44.