Brian is self-employed. If he earns $2,040 monthly, what will be his total social security and Medicare taxes for the first quarter? For self-employed persons, social security tax is 12.4% of wages up to $117,000, and Medicare tax is 2.9% of all wages.
clearly, that will be
(0.124 + 0.029)*2040*3
since 12*2040 < 117,000
To find Brian's total social security and Medicare taxes for the first quarter, we need to determine his quarterly wages first.
1. Multiply Brian's monthly earnings by 3 to calculate his quarterly earnings:
Quarterly earnings = $2,040 * 3 = $6,120
Now, we will calculate the social security tax and Medicare tax separately.
Social security tax:
2. Determine the maximum wage subject to social security tax:
Maximum wage subject to social security tax = $117,000
3. Calculate the social security tax for the first quarter:
Social security tax = (Quarterly earnings * Social security tax rate)
Social security tax = ($6,120 * 0.124) = $758.88
Medicare tax:
4. Calculate the Medicare tax for the first quarter:
Medicare tax = (Quarterly earnings * Medicare tax rate)
Medicare tax = ($6,120 * 0.029) = $177.48
Therefore, Brian's total social security and Medicare taxes for the first quarter will be $758.88 (social security tax) + $177.48 (Medicare tax) = $<<758.88+177.48=936.36>>936.36.
To determine Brian's total social security and Medicare taxes for the first quarter, we need to calculate the taxes separately and then sum them up.
1. Calculate the social security tax:
- Social security tax rate is 12.4% of wages.
- The maximum wage subject to social security tax is $117,000.
To find the social security tax amount for the first quarter, we need to calculate Brian's quarterly earnings. Since he earns $2,040 monthly, his quarterly earnings would be:
Quarterly earnings = Monthly earnings x Number of months in a quarter
Quarterly earnings = $2,040 x 3
Quarterly earnings = $6,120
Now, we calculate the social security tax for the first quarter:
Social security tax = Quarterly earnings x Social security tax rate
Social security tax = $6,120 x 0.124
Social security tax = $759.48
2. Calculate the Medicare tax:
- Medicare tax rate is 2.9% of all wages.
To find the Medicare tax amount for the first quarter, we simply calculate 2.9% of Brian's quarterly earnings:
Medicare tax = Quarterly earnings x Medicare tax rate
Medicare tax = $6,120 x 0.029
Medicare tax = $177.48
3. Calculate the total social security and Medicare taxes for the first quarter:
Total taxes = Social security tax + Medicare tax
Total taxes = $759.48 + $177.48
Total taxes = $936.96
Therefore, Brian's total social security and Medicare taxes for the first quarter will be $936.96.