Marla Smith, an employee of Clown College, earned $113,000 prior to December. Smith's salary for December is $11,000. For what amount will Smith's December salary be subject to OASDI tax and HI tax, respectively.

Question

Quizplus · Accepted Answer

The OASDI tax applies only up to the wage base limit, which is $128,400 for 2023. Since Smith has already earned $113,000, only $15,400 more can be taxed for OASDI. Therefore, the full $11,000 December salary is subject to OASDI. HI tax has no wage base limit, so the entire $11,000 is subject to HI tax.

Marla Smith, an Employee of Clown College, Earned $113,000 Prior