Find the Social Security tax and Medicare tax on the annual gross income of a self-employed individual. For a
self-employed person, the FICA rate is 12.4% and the Medicare rate is 2.9%. Round to the nearest cent if needed.
-Larry Barnes, management consultant, earned $74,920.84

Question

Quizplus · Accepted Answer

Social Security tax = Annual gross income x FICA rate
= $74,920.84 x 0.124
= $9,290.18

Medicare tax = Annual gross income x Medicare rate
= $74,920.84 x 0.029
= $2,172.70

Therefore, the correct answer is D) $9,290.18, $2,172.70. To calculate the Social Security tax, we have to multiply the gross income by the FICA rate (12.4%):
$74,920.84 x 0.124 = $9,290.18

To calculate the Medicare tax, we have to multiply the gross income by the Medicare rate (2.9%):
$74,920.84 x 0.029 = $2,172.70

Therefore, the correct answer is D: $9,290.18 for Social Security tax and $2,172.70 for Medicare tax.

Find the Social Security Tax and Medicare Tax on the Annual