Tutorial Exercise Marc Batchelor, a self-employed sales consultant, has estimated annual earnings of $306,000 this year. His social security tax rate is 12.4% up to the wage base, Medicare is 2.9%, and his federal income tax rate is 24%. How much estimated tax must Marc send to the IRS each quarter? Step 1 The amount of tax Marc owes the IRS each year will be based on his estimated annual earnings and the tax rate. In general, the amount of tax will be found using the following formula where the wage will vary depending on the type of tax and the tax rate is expressed as a decimal. tax wage x tax rate The tax rate for social security is 12.4% up to the wage base. When employees.reach the wage base for the year, they are no longer subject to the tax. The wage base for social security is $128,400. Since Marc's estimated annual earnings of $306,000 are Select the wage base, the wage that will be used to calculate the amount of social security tax will be $ There is no wage base associated with Medicare or federal income tax. Thus, the wage that will be used to calculate the amount of Medicare and federal income tax is s al