Questions: Calculate the person's FICA taxes, marginal income taxes, and combined total tax. Then find the person's overall tax rate. Use the given tax rates. Assume that the individual is single, has no other sources of income and no adjustments to income, and takes the standard deduction. Brittany earned 144,400 in wages and tips.

Solution Steps

Brittany's FICA taxes consist of Social Security and Medicare taxes. The calculations are as follows:

• Social Security Tax: \[ \text{Social Security Tax} = \min(144400, 160200) \times 0.062 = 8952.8 \]

• Medicare Tax: \[ \text{Medicare Tax} = 144400 \times 0.0145 = 2093.8 \]

• Total FICA Tax: \[ \text{FICA Tax} = 8952.8 + 2093.8 = 11046.6 \]

Brittany's taxable income is calculated by subtracting the standard deduction from her total income:

\[ \text{Taxable Income} = 144400 - 13850 = 130550 \]

Using the tax brackets, we calculate the income tax owed on the taxable income of \(130550\):

\[ \text{Income Tax} = 25167.5 \]

The combined total tax is the sum of FICA taxes and income taxes:

\[ \text{Combined Total Tax} = 11046.6 + 25167.5 = 36214.1 \]

The overall tax rate is calculated by dividing the combined total tax by the total income:

\[ \text{Overall Tax Rate} = \frac{36214.1}{144400} \approx 0.2508 \]

Final Answer