Finance Unit

1.11 Paying Taxes

2024 Tax Brackets and Income Tax Rates

Tax Rate Single Married Filing Jointly
10% $0 to $11,925 $0 to $23,850
12% $11,926 to $48,475 $23,851 to $96,950
22% $48,476 to $103,350 $96,951 to $205,700
24% $103,351 to $197,300 $206,701 to $394,600
32% $197,301 to $250,525 $394,601 to $501,050
35% $250,526 to $626,350 $501,051 to $751,600
37% $626,351 or more $751,601 or more

Calculating Income Taxes

Use the Nerdwallet tax calculator to calculate the federal income taxes owed.

Nerdwallet Tax Calculator

  1. In 2025 you earned minimum wage $15.00 per hour. You worked 40 hours a week for 50 weeks. You did not earn any interest, nor did you have any tax-deferred contributions.

    1. Wages: ____________________ $30,000
    2. You must pay 7.65% of your wages for Social Security and Medicare taxes. Calculate your Social Security/Medicare taxes for 2024. ____________________ $2295
    3. Amount of Standard Deduction: ____________________ $15,750
    4. Amount of Federal Taxes owed: _____________________ $1471.48


  2. In 2025 you earned $65,000 at your job. Your investments earned you $700 in interest for the year. You paid $3000 into a tax-deferred retirement account and you are filing taxes as a single person.
    1. Wages: _____________________ $65,000
    2. You must pay 7.65% of your wages for Social Security and Medicare taxes. Calculate your Social Security/Medicare taxes for 2024. ____________________ $4,972.50
    3. Gross Income (Wages + Interest): ____________________ $65,700
    4. Amount of Standard Deduction: ____________________ $15,750
    5. Amount of Federal Taxes owed: _____________________ $5,395.48


  3. In 2025 you earned $120,000 at your job. Your investments earned you $1400 in interest for the year. You paid $5000 into a tax-deferred retirement account and you are filing taxes as a single person.

    1. Wages: ___________________ $120,000
    2. You must pay 7.65% of your wages for Social Security and Medicare taxes. Calculate your Social Security/Medicare taxes for 2024. ____________________ $9,180
    3. Gross Income (Wages + Interest): ____________________ $121,400
    4. Amount of Standard Deduction: ____________________ $15,750
    5. Amount of Federal Taxes owed: _____________________ $17,056.88


  4. In 2025 you earned $40,000 at your job. Your spouse earned $45,000. You have two children. You did not earn any interest, but you did have $3000 in tax-deferred contributions. You are married filing jointly.
    1. Wages: ____________________ $85,000

    2. You must pay 7.65% of your wages for Social Security and Medicare taxes. Calculate your Social Security/Medicare taxes for 2024. ____________________ $6,502.50
    3. Amount of Standard Deduction: ____________________ $31,500
    4. Taxes owed: _____________________ $5,582.98
    5. There is a $2200 per child tax credit.

      Amount of Child Credit: _____________________

      $4400

      6. Amount of Federal Taxes owed (Calculated from table – Child credit): _______________________ $1182.98

    5. 2025 FICA Tax Rates


    Employee's Rates Matching Rates Paid
    by the Employer    		 Self-Employed Rates
    7.65% on first $168,600
    of income    		 7.65% on first $168,600
    of income    		 15.3% on first $168,600
    of net earnings
    1.45% on income between
    $168,600 and $200,000    		 1.45% on income between
    $168,600 and $200,000    		 2.9% on income between
    $168,600 and $200,000
    2.35% on income above
    $200,000    		 2.35% on income above
    $200,000    		 3.8% on earnings above
    $200,000

    FICA taxes include Social Security and Medicare. The Social Security tax applies to the first $168,600 of income, while the Medicare tax applies to all income.

  5. Suppose Dylan has $35,000 of income from work and is not self-employed. How much will Dylan have to pay in FICA taxes?

    6. \(\begin{equation} .0765(35000)=\$ 2677.50 \end{equation} \)

  6. Suppose Tyler has $150,050 of income from work and is not self-employed. How much will Tyler have to pay in FICA taxes?

    7. \(\begin{equation} .0765(142,800)= \$10,924.20 \end{equation} \)

    \(\begin{equation} .0145(7250)=\$105.13 \end{equation} \)

    \( \begin{equation} \$ 10,924.20 + \$ 105.13 = \$ 11,029.33 \end{equation} \)

  7. Suppose Alysa has $170,000 of net earnings from work and is self-employed. How much will Alysa have to pay in FICA taxes?

    8. \(\begin{equation} .153(142,800)=\$21,848.40 \end{equation} \)

    \(\begin{equation} .029(27,200)=\$788.80 \end{equation} \)

    \( \begin{equation} \$ 21,848.40 + \$ 788.80 = \$ 22,637.20 \end{equation} \)