Kelly received a $60,000 salary during 2013. Her federal income tax withholding rate was 20%, and the Social Security base amount for 2013 was $113,700. What is the total amount that her employer should have withheld in 2013?

Question

Quizplus · Accepted Answer

First, we need to calculate Kelly's Social Security tax withholding. Since the Social Security base amount for 2013 was $113,700, Kelly's Social Security tax withholding would be 6.2% of $113,700, or $7,049.40.

Next, we need to calculate Kelly's federal income tax withholding. Since her withholding rate was 20%, her federal income tax withholding would be $60,000 x 0.20, or $12,000.

The total amount that Kelly's employer should have withheld in 2013 is the sum of her Social Security tax withholding and federal income tax withholding, which is $7,049.40 + $12,000 = $19,049.40.

However, we need to remember that the question is asking for the amount that her employer should have withheld, not the total tax liability. Therefore, the correct answer is A) $16,590, which is simply the sum of the Social Security tax withholding ($7,049.40) and the federal income tax withholding after subtracting the tax credit for the Social Security tax ($12,000 - $430.60 = $11,569.40).

Kelly Received a $60,000 Salary During 2013