Calculate the total tax (FICA and income taxes) owed by eachindividual in the following pair. Compare their overall tax rates.Assume that each individual is married and filing separately andtakes the standard deduction. Use the tax rates in the table to theright and the special rates for the dividends and capitalgains.
Pierre earned $138,000 in wages. Katerina earned $138,000, allfrom dividends and long-term capital gains.
Calculate The Total Tax Fica And Income Taxes Owed By Each Individual In The Following Pair Compare Their Overall Tax 1 (78 KiB) Viewed 53 times
Calculate the total tax (FICA and income taxes) owed by each individual in the following pair. Compare their overall tax rates. Assume that each individual is married and filing separately and takes the standard deduction. Use the tax rates in the table to the right and the special rates for the dividends and capital gains. Pierre earned $138,000 in wages. Katarina earned $138,000, all from dividends and long-term capital gains. For 2017, the FICA tax rates were 7.65% on the first $127,200 of income from wages and 1.45% on any income from wages in excess of $127,200. The tax rates for long-term capital gains and dividends were 0% for income in the 10\% and 15% tax brackets, 15% for income in all higher brackets except the highest 39.6% bracket, and 20% for income in the 39.6% tax bracket. An additional Medicare tax applies to taxpayers with adjusted gross income above $200,000 for individuals (single or head of household) or $250,000 for married couples. Above these thresholds, the additional Medicare tax is 3.8% on most income that is not otherwise subject to FICA taxes, such as income from investments and dividends, or a 0.9% surcharge on ordinary income. The total tax owed by Pierre is $ (Round up to the nearest dollar.)
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