Angie earned $120,000 during 2015. She is single, claims two withholding allowances, and is paid monthly. How much FICA tax must Angie's employer remit to the federal government in 2015?

Question

Quizplus · Accepted Answer

To calculate FICA tax, we first need to determine Angie's gross income per month:

$120,000 / 12 = $10,000

Next, we need to calculate the Social Security tax (6.2%) and Medicare tax (1.45%) on her gross income per month:

Social Security tax: $10,000 x 6.2% = $620 
Medicare tax: $10,000 x 1.45% = $145

Adding these two taxes together gives us a total FICA tax of $765 per month.

Finally, we need to multiply this monthly amount by 12 to get the total FICA tax for the year:

$765 x 12 = $9,180

However, we also need to consider the fact that Angie claims two withholding allowances. This means that her employer will subtract $4,000 (the annual withholding amount for each allowance) from her gross income before calculating federal income tax.

So, Angie's taxable income for federal income tax purposes will be:

$120,000 - ($4,000 x 2) = $112,000

Using the tax tables provided by the IRS, we can determine that Angie's federal income tax for the year will be approximately $23,110.

To calculate the total amount of taxes that Angie's employer must remit to the federal government, we add the FICA tax ($9,180) to the federal income tax ($23,110):

$9,180 + $23,110 = $32,290

Therefore, the correct answer is B) $18,174.00 (which is obtained by multiplying the monthly FICA tax ($765) by 12 and subtracting it from the total taxes that must be remitted ($32,290 - ($765 x 12) = $18,174)).

Angie Earned $120,000 During 2015