Question $1$

$10$ pts

Note: Social Security and Medicare payroll taxes are collected together as the Federal Insurance Contributions Act Tax $-$FICA tax. FICA tax rates are statutorily set and can only be changed through new tax legislation.

Social Security is financed by a $12\mathrm{.}4$ percent payroll tax on wages up to the taxable earnings cap, with half $(6\mathrm{.}2$ percent$)$ paid by workers and the other half paid by employers. Self$-$employed workers pay the whole $12\mathrm{.}4$ percent.

For employers and employees, the Medicare payroll tax rate is a matching $1\mathrm{.}45$ percent on all earnings $($selfemployed workers pay the full $2\mathrm{.}9$ percent$),$ bringing the total Social Security and Medicare payroll withholding rate for employers and employees to $7\mathrm{.}65$ percent$-$with only the Social Security portion limited to the taxable income maximum amount of $142,800$ in $2021.$

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|\}$

$\backslash$hline Taxable Income & Tax Rate $\backslash \backslash$

$\backslash$hline$\backslash (\backslash$$ $0-\backslash$$ $8,700\backslash )$ & $10$ percent $\backslash \backslash$

$\backslash$hline$\backslash (\backslash$$ $8,701\backslash )-\backslash$$$35,350$ & $15$ percent $\backslash \backslash$

$\backslash$hline$\backslash (\backslash$$ $35,351\backslash )-\backslash$$$85,650$ & $22$ percent $\backslash \backslash$

$\backslash$hline$\backslash (\backslash$$ $85651\backslash )-\backslash$$$178,650$ & $25$ percent $\backslash \backslash$

$\backslash$hline$\backslash (\backslash$$ $178,651-\backslash$$ $388,350\backslash )$ & $28$ percent $\backslash \backslash$

$\backslash$hline Over $\backslash$#$388,350$ & $33$ percent $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$ An employee made $\backslash (\backslash$$ $167,000\backslash )$ in $2021$ and based on the information in the table above, please answer the following questions. $*$You should not spend more than $10$ minutes on this question.

$1.$ What was the total amount this employee paid in social insurance taxes, comprising both social security and Medicare taxes?

$2.$ What was the federal income tax bill $($liability$)$ for this employee

$3.$ What was the average income tax rate for this employee

$4.$ What was the total payroll tax amount for this employee, including federal income tax, social security, and Medicare taxes, assuming no state and local income taxes? An employee made $\backslash (\backslash$$ $167,000\backslash )$ in $2021$ and based on the information in the table above, please answer the following questions. $*$You should not spend more than $10$ minutes on this question.

$1.$ What was the total amount this employee paid in social insurance taxes, comprising both social security and Medicare taxes?

$2.$ What was the federal income tax bill $($liability$)$ for this employee

$3.$ What was the average income tax rate for this employee

$4.$ What was the total payroll tax amount for this employee, including federal income tax, social security, and Medicare taxes, assuming no state and local income taxes?