Asked by James Logan on Jul 21, 2024
Verified
In 2008,Yolanda paid $3,875 in Social Security tax.If the Social Security tax rate was 6.2% to the maximum income of $94,200 that year,what was Yolanda's taxable income?
A) $6,250
B) $38,750
C) $62,500
D) $66,375
Taxable Income
The amount of an individual's or a company's income used to determine how much tax is owed, after deductions and exemptions.
Social Security Tax Rate
The rate at which income is taxed to fund the Social Security program, which provides retirement, disability, and survivorship benefits.
- Gain an understanding of the procedure for calculating Social Security and Medicare taxes derived from annual income.
Verified Answer
LR
lokeshwar ReddyJul 25, 2024
Final Answer :
C
Explanation :
First, determine the maximum taxable income for Social Security tax in 2008 by dividing $3,875 by 6.2%:
$3,875 / 0.062 = $62,500
Therefore, Yolanda's taxable income was $62,500 or less in 2008. So, the correct answer is (C) $62,500.
$3,875 / 0.062 = $62,500
Therefore, Yolanda's taxable income was $62,500 or less in 2008. So, the correct answer is (C) $62,500.
Learning Objectives
- Gain an understanding of the procedure for calculating Social Security and Medicare taxes derived from annual income.
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