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.
(720 * 0.062) + (720 * 0.0145)= ?
To calculate the total deduction for social security and Medicare taxes on Juanita's next weekly paycheck, we first need to find out how much of her earnings have already been subjected to these taxes.
Step 1: Find the amount of wages Juanita has already earned this year that are subject to social security tax.
- The social security tax is 6.2% of wages up to $106,800.
- Since Juanita has already earned $10,800 this year, we need to find the smaller value between $106,800 and $10,800 to determine the wages subject to social security tax.
- In this case, $10,800 is the smaller value.
Step 2: Calculate the social security tax deduction on Juanita's next weekly paycheck.
- Multiply the wages subject to social security tax ($10,800) by the social security tax rate (6.2% or 0.062) to calculate the social security tax deduction.
Social security tax deduction = $10,800 * 0.062
Next, we calculate the Medicare tax deduction.
Step 3: Calculate the Medicare tax deduction on Juanita's next weekly paycheck.
- The Medicare tax is 1.45% of all wages.
- Multiply Juanita's total weekly paycheck ($720) by the Medicare tax rate (1.45% or 0.0145).
Medicare tax deduction = $720 * 0.0145
Finally, we can determine the total deduction for both social security and Medicare taxes by adding the two deductions together.
Total deduction = social security tax deduction + Medicare tax deduction
Now you can plug in the values and calculate the answer.