Using the following information:
Social Security Tax
if gross income is ≤
≤
$128,400, pay 6.2% of gross income
if gross income > $128,400, pay 6.2% of $128,400
Medicare Tax
if gross income ≤
≤
$200,000, pay 1.45% of gross income
if gross income > $200,000, pay 2.35% of income that exceeds $200,000 and 1.45% on first $200,000

Find the total payroll taxes John Doe would have withheld annually if he made $240334.17 per year.
Round appropriately and include any necessary units.
Answer: Question 6

To calculate the total payroll taxes John Doe would have withheld annually, we need to determine both the Social Security tax and the Medicare tax based on his income of $240,334.17 per year.

### 1. **Social Security Tax:**
- **If gross income ≤ $128,400:** Pay 6.2% of gross income.
- **If gross income > $128,400:** Pay 6.2% of $128,400.

John Doe's income exceeds $128,400, so:
\[
\text{Social Security Tax} = 6.2\% \times 128,400 = 0.062 \times 128,400 = 7,960.80
\]

### 2. **Medicare Tax:**
- **If gross income ≤ $200,000:** Pay 1.45% of gross income.
- **If gross income > $200,000:** Pay 1.45% on the first $200,000, and 2.35% on the amount exceeding $200,000.

For the first $200,000:
\[
\text{Medicare Tax on first } \$200,000 = 1.45\% \times 200,000 = 0.0145 \times 200,000 = 2,900.00
\]
For the amount exceeding $200,000 ($240,334.17 - $200,000 = $40,334.17):
\[
\text{Medicare Tax on excess } = 2.35\% \times 40,334.17 = 0.0235 \times 40,334.17 \approx 948.86
\]

### 3. **Total Medicare Tax:**
\[
\text{Total Medicare Tax} = 2,900.00 + 948.86 = 3,848.86
\]

### 4. **Total Payroll Taxes:**
\[
\text{Total Payroll Taxes} = \text{Social Security Tax} + \text{Medicare Tax} = 7,960.80 + 3,848.86 = 11,809.66
\]

**Final Answer:** John Doe would have a total of **$11,809.66** withheld annually for payroll taxes.

Would you like to see a detailed breakdown or have any questions?

Here are 5 related questions you might find interesting:
1. How would the payroll tax change if John Doe's income were $150,000 instead?
2. What is the impact of the additional Medicare tax on income exceeding $200,000?
3. How would the payroll tax be affected if the Social Security income cap were removed?
4. How do payroll tax rates compare across different income levels?
5. What are the implications of these payroll taxes on take-home pay?

**Tip:** Understanding how different parts of payroll taxes work can help you better anticipate how changes in income might affect your taxes.

Learn how to calculate total payroll taxes for an income of $240,334.17 annually. This problem involves computing Social Security and Medicare taxes based on income thresholds. Detailed breakdown provided.

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