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Tonja is a married taxpayer who claims 2 withholding allowances. She earns
$600 per week, and pays $150 per week in childcare expenses. How much will
she save in federal income and FICA taxes if she has her childcare expenses
deducted from her check before taxes?

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The amount that Tonja will save in Federal Income and FICA Taxes if she has her childcare expenses deducted from her check before taxes is: $26.17

What is Federal Income Tax?

Federal Income Tax is a tax that is levied by the Federal Government and most states in the United States of America. It comprises of 7 tax rates.

What is FICA Tax?

FICA Tax is a Federal Insurance Contributions Act Tax. This tax is levied on every payroll of employees to fund Social Security and Medicare programs. This is divided into two parts:

  • Social Security Tax which is 6.2% and
  • Medicare Tax which is 1.45%. The total is 7.65%

How to calculate Tonja's Tax before deduction

Federal Tax rate first level is 10% on 0$ - $19,900.

1) Hence, the first tax is 10% on $600, which is $60

2) The next tax is FICA. This is applied to the Gross Pay of $600.

Applying both taxed under FICA we have 7.65% * $600 = $45.9

Total Tax before a deduction is:

$60 + $45.9 = $105.6

The Tax Payable if childcare expenses is deducted first will be:

10% on $450     = $45

7.65% on $450 = $34.43

Total                   = $79.43

Hence the tax savings will be:

105.6 - 79.43 = $26.17

Learn more about FICA Tax at:
https://brainly.com/question/3214345


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