FICA Taxes. For each of the following individuals, calculate the FICA taxes and income taxes to obtain the total tax owed. Then find the overall tax rate on the gross income, including both FICA income taxes. Assume that all the individuals are single and take the standard deduction. Use the tax rates on Table 4.9.
Jack earned a salary of $44,800 and received $1,250 in interest
The solution this problem FICA Tax = $3,427; Income tax = $4881; total tax = $8308; tax rate = 18.0%
Extracted text: 2017 Marginal Tax Rates, Standard Deductions, and Exemptions* TABLE 4.9 Married Filing Jointly Married Filing Separately Head of Tax Rate** Single Household up to $13,350 up to $50,800 10% up to $9325 up to $18,650 up to $9325 15% up to $37,950 up to $75,900 up to $37,950 25% up to $91,900 up to $153,100 up to $76,550 up to $131,200 up to $212,500 up to $416,700 28% up to $191,650 up to $233,350 up to $116,675 33% up to $416,700 up to $416,700 up to $208,350 up to $470,700 above $470,700 35% up to $418,400 up to $235,350 up to $444,550 39.6% above $418,400 above $235,350 above $444,550 Standard deduction $6350 $12,700 $6350 $9350 Exemption (per person) $4050 $4050 $4050 $4050 This table ignores (i) exemption and deduction phase-outs that apply to high-income taxpayers; (i) the alterna- tive minimum tax (AMT) that affects many middle- and high-income taxpayers; (ii) potential changes in tax law made after this text was printed that may have changed the values given in this table for 2017. * Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the 15% marginal rate affects income starting at $9325, which is where the 10% rate leaves off, and continuing up to $37,950.