Marci has two jobs and both employers withheld FICA tax.From her first job,she earned $100,600 and from her second job she earned $18,300.How much can Marci claim on her Form 1040 as excess social security tax paid in 2016?

Question

Quizplus · Accepted Answer

The social security tax rate for both the employee and employer is 6.2% on wages up to $127,200 for 2016. Since Marci has two jobs and both of her employers withheld social security tax from her wages, she may have overpaid social security tax. 
The maximum amount of social security tax that she should have paid in 2016 is $7,347.60 (6.2% of $118,500, the maximum taxable wage base for social security in 2016). However, her total wages from both jobs was $118,900 ($100,600 + $18,300), which means that she paid too much social security tax on $400 of earnings ($118,900 - $118,500). 
Thus, the excess social security tax paid is $24.80 (6.2% of $400), which Marci can claim on her Form 1040. Therefore, the correct answer is B) $24.80.

Marci Has Two Jobs and Both Employers Withheld FICA Tax