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6-5 SOCIAL SECURITY AND MEDICARE

6-5 SOCIAL SECURITY AND MEDICARE. OBJECTIVES. To compute paycheck deductions for Social Security. To compute paycheck deductions for Medicare. Social Security Federal Insurance Contributions Act (FICA) FICA tax Social Security tax Medicare tax maximum taxable income

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6-5 SOCIAL SECURITY AND MEDICARE

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  1. 6-5SOCIAL SECURITY AND MEDICARE OBJECTIVES To compute paycheck deductions for Social Security. To computepaycheck deductions for Medicare.

  2. Social Security Federal Insurance Contributions Act (FICA) FICA tax Social Security tax Medicare tax maximum taxable income Social Security number Key Terms

  3. Example 1 Ramiro got his first job in 2006. In that year, Social Security tax was 6.2% of income up to $94,200. Medicare tax was 1.45%. If Ramiro earned $73,210 in 2006, how much did he pay for Social Security and Medicare taxes?

  4. Example 2 Express the Social Security tax for 2006 as a piecewise function.

  5. EXAMPLE 3 Graph the Social Security tax piecewise function from Example 2.

  6. CHECK YOUR UNDERSTANDING Mark's Social Security tax was $3,500 during the year in the graph in Example 3. Use the graph to approximate his taxable income.

  7. EXAMPLE 4 In 1988, Social Security tax was 7.51%, to the maximum income of $45,000. If Grace earned $51,211 in 1988, how much Social Security did she pay?

  8. CHECK YOUR UNDERSTANDING In 1988 Ramona paid $2,853.80 in Social Security tax. What was Ramona's taxable income in 1988?

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