Elwin worked at three jobs during 2016. He earned $30,000, $27,000, and $9,000, respectively, from the jobs. What amount can Elwin apply as a credit against his 2016 income tax liability for overpayment of FICA taxes?

Question

Quizplus · Accepted Answer

Elwin's total income is $30,000 + $27,000 + $9,000 = $66,000. The maximum amount of wages subject to FICA taxes in 2016 is $118,500. 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 x 0.0765 = $5,053.50. Elwin's total FICA taxes withheld are $5,053.50. The maximum amount of FICA taxes that can be applied as a credit against income tax liability is $45.90.

Elwin Worked at Three Jobs During 2016