What is the Medicare tax withheld from an annual salary of $166,090?

• A. $2,408.31
• B. $1,700.50
• C. $3,000.00
• D. $2,500.00

Answer: (A)

To determine the Medicare tax withheld from an annual salary of $166,090, it's essential to understand the current Medicare tax rate. As of the latest information, the Medicare tax rate is set at 1.45% on all earned income, and for high-income earners, there is an additional 0.9% surtax that applies to income over $200,000.

Calculating the Medicare tax for a salary of $166,090 involves simply applying the 1.45% tax rate, as this salary does not exceed the threshold for the additional surtax.

Calculating it:

1.45% of $166,090 = 0.0145 * 166,090

= $2,408.31

This figure matches the answer provided, confirming that this is the correct Medicare tax amount that would be withheld from an annual salary of $166,090. Understanding the calculation process, including applying the correct percentage, is crucial for correctly assessing tax withholdings.