Questions: Decide whether the following statement makes sense (or is clearly true) or does not make sense (or is clearly false). Explain your reasoning. Assume 2021 tax rates and policies. I earned a total gross income of only 10,000 last year, yet I still had to pay 765 in FICA taxes. Choose the correct answer below. A. The statement does not make sense because the tax rate on 10,000 would be 10%, not 7.65%. B. The statement does not make sense because the tax rate on 10,000 would be 1.45%, not 7.65%. C. The statement makes sense because FICA taxes apply to gross income, not taxable income. D. The statement does not make sense because the income is less than the standard deduction of 12,550, so no tax would be owed.
Transcript text: Decide whether the following statement makes sense (or is clearly true) or does not make sense (or is clearly false). Explain your reasoning. Assume 2021 tax rates and policies.
I earned a total gross income of only $\$ 10,000$ last year, yet I still had to pay $\$ 765$ in FICA taxes.
Choose the correct answer below.
A. The statement does not make sense because the tax rate on $\$ 10,000$ would be $10 \%$, not $7.65 \%$.
B. The statement does not make sense because the tax rate on $\$ 10,000$ would be $1.45 \%$, not $7.65 \%$.
C. The statement makes sense because FICA taxes apply to gross income, not taxable income.
D. The statement does not make sense because the income is less than the standard deduction of $\$ 12,550$, so no tax would be owed.
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