If you earned a salary of $102,000, what would be your total FICA taxes? (Use a combined tax rate of 15.3%, which is the rate used in the textbook.)

a. How much would you pay in taxes for Social Security for the year? For Medicare?

b. How much did your employer pay in Social Security tax and Medicare tax on your behalf?

To calculate the FICA taxes, we’ll break down the total tax into Social Security and Medicare components. The FICA tax rate is 15.3%, split as follows:
- **Social Security Tax:** 12.4% of the income up to a certain limit ($160,200 in 2023)
- **Medicare Tax:** 2.9% of all income (no cap)

### Part A: Employee's FICA Taxes
Let's calculate the taxes for Social Security and Medicare based on a salary of $102,000.

#### Social Security Tax:
The Social Security tax is 6.2% from the employee’s side and 6.2% from the employer’s side, totaling 12.4%. Since $102,000 is under the limit of $160,200, we use the full amount.

\[
\text{Social Security Tax (Employee Portion)} = 102,000 \times 6.2\% = 102,000 \times 0.062 = 6,324
\]

#### Medicare Tax:
The Medicare tax is 1.45% from the employee’s side and 1.45% from the employer’s side, totaling 2.9%. Since there is no cap for Medicare, the full income is subject to this tax.

\[
\text{Medicare Tax (Employee Portion)} = 102,000 \times 1.45\% = 102,000 \times 0.0145 = 1,479
\]

So, the total FICA tax from the employee side is:
\[
6,324 + 1,479 = 7,803
\]

#### Answer to Part A:
- **Social Security Tax:** $6,324
- **Medicare Tax:** $1,479
- **Total Employee Contribution:** $7,803

### Part B: Employer's FICA Taxes
The employer also pays an equal portion of the FICA taxes, which includes 6.2% for Social Security and 1.45% for Medicare.

- **Social Security Tax (Employer):** $6,324
- **Medicare Tax (Employer):** $1,479

#### Total Employer Contribution:
\[
6,324 + 1,479 = 7,803
\]

#### Answer to Part B:
- **Social Security Tax Paid by Employer:** $6,324
- **Medicare Tax Paid by Employer:** $1,479
- **Total Employer Contribution:** $7,803

In summary:
- **Employee Total FICA Taxes:** $7,803
- **Employer Total FICA Taxes:** $7,803

Would you like further details on these calculations, or have any questions?

### Additional Questions to Consider
1. What is the FICA tax liability if the salary were above the Social Security limit?
2. How would additional Medicare tax apply if the salary were higher?
3. What are the impacts of self-employment on FICA tax rates?
4. How does the Social Security wage cap affect high-income earners?
5. What are the individual and employer tax responsibilities for incomes under the Social Security wage cap?

### Tip
To quickly estimate FICA taxes, remember that it is generally 15.3% of the income, split equally between employer and employee.

If you earned a salary of $102,000, what would be your total FICA taxes? (Use a combined tax rate of 15.3%, which is the rate used in the textbook.)
a. How much would you pay in taxes for Social Security for the year? For Medicare?
b. How much did your employer pay in Social Security tax and Medicare tax on your behalf?

Discover how to calculate FICA taxes for a salary of $102,000 using a 15.3% combined tax rate. Learn the breakdown between Social Security and Medicare taxes for both the employee and employer, with detailed formulas and step-by-step calculations. Suitable for high school students and anyone learning income tax basics.

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