Ben has 2 jobs and both employers withhold FICA taxes.From his first job,Ben earned $85,034 and from his second job,he earned $34,496.How much can Ben claim as additional payment on his Form 1040 as excess social security tax paid in 2016?

Question

Quizplus · Accepted Answer

For 2016, the social security tax rate is 6.2% and the maximum taxable earnings is $118,500. Since Ben earned $85,034 from his first job, he would have paid the maximum social security tax on this income ($5,011.48). From his second job, he earned $34,496, which means he paid $2,136.03 in social security tax (6.2% x $34,496). However, since Ben's total income ($85,034 + $34,496 = $119,530) is over the maximum taxable earnings limit, he paid $7,147.51 in social security tax. The maximum social security tax he should have paid is $7,347.90 ($118,500 x 6.2%). Therefore, Ben can claim $200.39 ($7,347.90 - $7,147.51) as additional payment on his Form 1040. Since only the excess social security tax paid is claimed on Form 1040, the correct answer is $63.86 (A).

Ben Has 2 Jobs and Both Employers Withhold FICA Taxes