Question

4. Chris is married filing separately with wages of $40,770 and income from investments of $3,370. He finds his taxable income to be $34,140.

a. (1.5 points) Find his total income tax.
(You may find completing the number line useful, but it is not required.)

Total Income Tax: $ _____________

b. (0.5 points) What is his tax bracket? __________ %

c. (2 points) Find his FICA tax and his overall federal tax rate.

FICA tax: $ _____________ Overall federal tax rate: __________%

Answer 1

Ans:

a. Total Income Tax of Chris:

Name - Chris (Employee)

Status - Married filing Separately

Year - 2020

Taxable Income	Tax rate	Tax amount ($)
Up to $9875	10%	$987.50
$9876 to $34140	12%	12% ($34140-$9875) = $2911,80
Total		$3899.30

Total Income Tax - $3899.30

b. Chris's Tax braket is 12% as his Taxable income is $34140 i.e.m between $9875 to $40125.

c. Calculation of FICA Tax-

Social Security - 6.2% of wages = 6.2% of $40770 = $2527.74

Medicare Tax - 1.45% of wages = 1.45% of $40770 = $591.17

Total FICA Tax = $2527.74 + 591.17 = $3118.91

Overall Federal tax rate-

Tax amount / Taxable income * 100 = $3899.30 / $34140 * 100 = 11.42%

FICA Tax: $3118.91 ,  Overall Federal tax rate: 11.42%