Hera earned $175,000 salary in 2018.Her husband,Zeus,earned $100,000 salary in 2018.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2018?

Question

Quizplus · Accepted Answer

FICA taxes are 7.65% of earned income, up to a maximum of $128,400 for Social Security tax and no limit for Medicare tax. In this case, the combined earned income of Hera and Zeus is $275,000. Therefore, their FICA taxes will be 7.65% of $275,000, which is $21,037.50. However, the maximum amount of Social Security tax that can be applied is $15,772.50 ($128,400 x 7.65%) since Hera and Zeus together earned more than the maximum income subject to Social Security tax. Therefore, their total FICA taxes will be $15,772.50 + $2,604.50 (1.45% of $180,000 remaining income above the Social Security limit) = $18,377, which is closest to option B.

Hera Earned $175,000 Salary in 2018