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Calculation of Social Security Tax and Marginal, Average and Effective Tax Rates on Social Security Taxes (LO. 1)

Rory earns $70,000 per year as a college professor. Latesia is a marketing executive with a salary of $140,000. With respect to the Social Security tax (OASDI: 6.2%; MHI: 1.45%) calculate the following:

(Hint: OASDI 6.2% tax is only on max of $128,400 for the year.)

When required, round the total taxes to two decimal places.

a.

Rory's total FICA taxes: $
Latesia's total FICA taxes: $

Rounding instructions for parts (b), (c), and (d): When required, round the tax rates to two decimal places.

b.

Rory's marginal tax rate: %
Latesia's marginal tax rate: %

c.

Rory's average tax rate: %
Latesia's average tax rate: %

d.

Rory's effective tax rate: %
Latesia's effective tax rate: %
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