Everybody has to pay taxes. Most Americans pay income tax, property tax, sales tax, and FICA (Federal Insurance Contributions Act) tax. FICA tax is taken directly from your paycheck by your employer. FICA taxes for employees for 2013 are 7.65 percent – a 6.2 percent Social Security contribution and a 1.45 percent Medicare tax.
Determine your FICA taxes. All earnings are subject to the 1.45 percent Medicare tax, but only the first $113,700 in earnings is subject to the 6.2 percent Social Security contribution requirement. This means that if your earnings are under $113,700, you can determine the amount your employer should have deducted for FICA taxes by multiplying your total income by .0765.
Using $50,000, for example, multiplied by .0765, gives you $3,825 for your total FICA withholding in 2013. If you earned $75,000 in 2013, then your total FICA withholding should be $5737.50 ($75,000 X .0765).
Compare the amount of FICA taxes withheld on your W-2 with the amount you calculated. If there is discrepancy of more than a few dollars, you should notify your employer.
- To determine your total FICA tax if you earned over $113,700, multiply any earnings above that amount by .0145 and add that to $8698.05 ($113,700 X .0765). If you earned $150,000, for example, you would multiply $36,300 ($150,000 minus $113,700) by .0145 to get $526.35. Add $526.35 to $8698.05 for a total FICA tax of $9224.40.
- Jupiterimages/Photos.com/Getty Images