Ethan received $135,000 in salary in 2018. What is his FICA tax if the Medicare rate is 1.45%, the Social Security rate is 6.2% on the 2018 maximum of $128,400, and the FUTA rate is 6% on a $7,000 maximum?
A) $9,823
B) $9,918
C) $10,243
D) $10,328

Question

Quizplus · Accepted Answer

First, we need to calculate the Social Security tax, which is 6.2% of the 2018 maximum of $128,400. 
6.2% x $128,400 = $7,960.80

Next, we need to calculate the Medicare tax, which is 1.45% of the entire salary amount. 
1.45% x $135,000 = $1,957.50

Finally, we need to calculate the FUTA tax, which is 6% of the $7,000 maximum. Since Ethan's salary exceeds $7,000, we only need to calculate on $7,000. 
6% x $7,000 = $420

Now, we can add up all the taxes: 
$7,960.80 + $1,957.50 + $420 = $10,338.30

Therefore, the closest answer is B, which is $9,918.

Ethan Received $135,000 in Salary in 2018