Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductions, and Exemptlons**

- Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$, which is where the $10 \%$ rate leaves off, and continuing up to $\$ 36,250$.
" This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers.
-Mark earned $40,208 from wages as a mechanic and made $1539 in interest. Calculate his FICA tax.

Question

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductions, and Exemptlons**

- Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$, which is where the $10 \%$ rate leaves off, and continuing up to $\$ 36,250$.
" This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers.
-Mark earned $40,208 from wages as a mechanic and made $1539 in interest. Calculate his FICA tax.

Quizplus · Accepted Answer

FICA tax is calculated as 6.2% for Social Security and 1.45% for Medicare on earned income. Mark's wages are $40,208, so his FICA tax is 7.65% of $40,208, which equals $3075.91. Interest income is not subject to FICA tax.

Solve the Problem 15%15 \%15% Marginal Rate Affects Income Starting At $8925\$ 8925$8925

Solve the Problem $15 \%$ Marginal Rate Affects Income Starting At $\$ 8925$