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How do I calculate FICA for - 1) W2 employee who earned $75K, (Is it 7.65% x $75K?) and 2) A self employed person who earned $125K $102K x 12.4% and $125K x2.9%?
Could you please clarify what tax year this pertains to? There are different income limits that the FICA applies to in any one tax year.
This is 2008 tax year.
2008 tax year, a maximum of $102,000 is subject to social security taxes. There is no limit on the amount that Medicare taxes apply to.The FICA taxes year 2008 are 6.2% for social security tax and 1.45% for Medicare tax. These taxes are paid by both the employee and the employer. employee with a salary of $75,000, his combined FICA taxes are $5,737.50. ($75,000 X 7.65%). The employer would make the same matching contribution.When a person is self employed, they must pay both the employee and the employer share of these taxes. So the FICA tax self employed person is 12.4% security and 2.9% .If a self employed person earns $125,000, he pays social security tax only on the limit of $102,000. So his SS tax is $12,648.00 - ($102,000 X 12.4%). He then also owes Medicare tax on the entire income of $125,000 total of $3,625 ($125,000 X 2.9%). His total FICA taxes are then $16,273.00.Thank you.