Question

which of the following statements explains the relationship between social security and medicare taxes?
a. both social security and medicare are applied to all wages up to the maximum taxable earnings.
b. both social security and medicare are applied to all wages without limit.
c. medicare is applied to all wages up to the maximum taxable earnings. social security is applied to all wages without limit.
d. social security is applied to all wages up to the maximum taxable earnings. medicare is applied to all wages without limit.

please select the best answer from the choices provided

○ a
○ b
○ c
○ d

Explanation:

To determine the correct answer, we analyze the tax rules for Social Security and Medicare:

• Social Security tax has a wage base limit (applied to wages up to the maximum taxable earnings).
• Medicare tax has no wage base limit (applied to all wages without limit).

Now we evaluate each option:

• Option a: Incorrect, as Medicare has no limit.
• Option b: Incorrect, as Social Security has a limit.
• Option c: Incorrect, it swaps the rules of the two taxes.
• Option d: Correct, as it matches the actual tax rules (Social Security up to max taxable earnings, Medicare on all wages).

Answer:

D. Social Security is applied to all wages up to the maximum taxable earnings. Medicare is applied to all wages without limit.