Elwin worked at three jobs during 2014. He earned $30,000, $27,000, and $9,000, respectively, from the jobs. What amount can Elwin apply as a credit against his 2014 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 2014 was $117,000. Therefore, Elwin's FICA taxes were calculated on $66,000. The FICA tax rate in 2014 was 7.65%. Therefore, Elwin's FICA taxes were $66,000 x 7.65% = $5,079. Elwin's total FICA taxes withheld were $5,079. The maximum amount of FICA taxes that Elwin could have withheld is $117,000 x 7.65% = $8,944.50. Therefore, Elwin overpaid his FICA taxes by $8,944.50 - $5,079 = $3,865.50. However, the maximum amount of FICA taxes that Elwin can apply as a credit against his 2014 income tax liability is $3,865.50 x 100% = $3,865.50.

Elwin Worked at Three Jobs During 2014