Which two components make up FICA taxes?

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Study for the General Financial Literacy State Test. Prepare with flashcards and multiple-choice questions, each with hints and explanations. Enhance your financial expertise for success!

Multiple Choice

Which two components make up FICA taxes?

Explanation:
FICA taxes fund two government programs: Social Security and Medicare. These payroll taxes come out of workers’ pay, typically shared between employee and employer. Social Security provides retirement and disability benefits, while Medicare offers health coverage for people 65 and older or with certain disabilities. Income tax and unemployment taxes are separate sources of funding and are not part of FICA. So, the two components that make up FICA taxes are Social Security and Medicare.

FICA taxes fund two government programs: Social Security and Medicare. These payroll taxes come out of workers’ pay, typically shared between employee and employer. Social Security provides retirement and disability benefits, while Medicare offers health coverage for people 65 and older or with certain disabilities. Income tax and unemployment taxes are separate sources of funding and are not part of FICA. So, the two components that make up FICA taxes are Social Security and Medicare.

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