What will be the total deduction for social security and Medicare taxes on Juanita's next biweekly paycheck of $2,000 if she has already earned $6,000 this year? Social security tax is 6.2% of wages up to $106,800. Medicare tax is 1.45% of all wages.
(2,000 * 0.062) + (2,000 * 0.0145) = ?
To calculate the total deduction for social security and Medicare taxes on Juanita's next biweekly paycheck, you need to determine the portion of her wages that are subject to each tax.
First, let's calculate the social security tax. The tax rate for social security is 6.2% of wages up to $106,800. Since Juanita has already earned $6,000 this year, we need to find the remaining amount of wages subject to social security tax.
Since Juanita's biweekly paycheck is $2,000, multiply it by the number of pay periods in a year to estimate her annual wages. Assuming there are 26 biweekly pay periods in a year ($2,000 × 26 = $52,000), Juanita's total estimated annual income is $52,000.
Now, we need to determine the remaining wages that are subject to social security tax. Subtract Juanita's current earnings ($6,000) from the maximum amount subject to the tax ($106,800): $106,800 - $6,000 = $100,800.
Therefore, $100,800 is the remaining amount of Juanita's wages that are subject to the social security tax.
To calculate the social security tax deduction on Juanita's next biweekly paycheck, multiply the remaining wages subject to the tax ($100,800) by the social security tax rate (6.2% or 0.062):
$100,800 × 0.062 = $6,249.60.
So, the social security tax deduction on Juanita's next biweekly paycheck will be $6,249.60.
Next, let's calculate the Medicare tax deduction. The Medicare tax rate is 1.45% of all wages, and there is no income limit. To calculate the Medicare tax deduction, simply multiply Juanita's biweekly paycheck of $2,000 by the Medicare tax rate (1.45% or 0.0145):
$2,000 × 0.0145 = $29.
Therefore, the Medicare tax deduction on Juanita's next biweekly paycheck will be $29.
To find the total deduction for social security and Medicare taxes, sum the deductions for both taxes:
$6,249.60 + $29 = $6,278.60.
Hence, the total deduction for social security and Medicare taxes on Juanita's next biweekly paycheck of $2,000 will be $6,278.60.