Question

Kyle, a single taxpayer, worked as a freelance software engineer for the first three months of 2020. During that time, he earned $86,000 of self-employment income. On April 1, 2020, Kyle took a job as a full-time software engineer with one of his former clients, Hoogle Inc. From April through the end of the year, Kyle earned $206,000 in salary. What amount of FICA taxes (self-employment and employment related) does Kyle owe for the year? (Round your intermediate calculations to the nearest whole dollar amount.)

Answer 1

Ans-

Part A

FICA tax = $6579
Because kyle's salary is below the $132900 Social Security wage base limit for 2019, she pays FICA taxes of 7.65% on her entire $86000 ($86,000 × 7.65% = $6579).

Part B

FICA Tax = $12474

Kyle’s total salary = 86,000+206,000 = $292,000

Kyle's salary is above the $132900 Social Security wage base limit for 2019, she pays social security tax of 6.20% on $132900 and Medicare tax of 1.45% on $292,000

FICA Tax = (132900*6.2%)+(292,000*1.45%) = $12473.8= $12474

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