Accredited Wealth Management Advisor Practice Exam

How much Medicare contribution tax do Ken and Mary need to pay based on their income?

1. $4,560

2. $3,800

3. $4,332

4. $3,572

The correct answer is: $3,572

To determine the Medicare contribution tax that Ken and Mary need to pay based on their income, it's important to understand how this tax is calculated. The Additional Medicare Tax applies to individuals with higher incomes, specifically those earning above a certain threshold. For married couples filing jointly, this threshold is typically set at $250,000 for earned income. The Medicare contribution tax rate is 0.9% on income exceeding this threshold. Therefore, if Ken and Mary's total earned income exceeds $250,000, any amount over this limit would be subject to the additional tax rate. For example, if their combined income was $260,000, the taxable amount for Medicare would be $10,000 ($260,000 - $250,000). Consequently, the calculation for the additional Medicare contribution tax would be $10,000 x 0.9%, equating to $90. In this scenario, the figure of $3,572 suggests that Ken and Mary likely have a total income that leads them to pay a calculated Medicare contribution tax based on their actual earned income level over the threshold. The calculation that results in the option of $3,572 indicates that the additional income they have that exceeds the threshold fits the tax bracket for this specific amount when applying