Elwin worked at three jobs during 2013.He earned $30,000,$27,000,and $9,000,respectively,from the jobs.What amount can Elwin apply as a credit against his 2013 income tax liability for overpayment of FICA taxes?

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Quizplus · Accepted Answer

Elwin's total income is $30,000 + $27,000 + $9,000 = $66,000. The maximum amount of income subject to FICA taxes is $113,700 in 2013. Therefore, Elwin's FICA taxes are calculated on $66,000. The FICA tax rate is 7.65%, so Elwin's FICA taxes are $66,000 * 0.0765 = $5,053.50. Elwin's total FICA taxes withheld are $30,000 * 0.0765 + $27,000 * 0.0765 + $9,000 * 0.0765 = $3,637.50. Therefore, Elwin's overpayment of FICA taxes is $5,053.50 - $3,637.50 = $1,416.00. However, the maximum amount of FICA taxes that can be applied as a credit against income tax liability is $1,416.00 * 0.9235 = $1,305.67. Therefore, Elwin can apply $1,305.67 as a credit against his 2013 income tax liability.

Elwin Worked at Three Jobs During 2013