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What is FICA tax?


Rick Murray

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FICA tax refers to the Federal Insurance Contribution Act tax and represent one of the deductions from gross income of the USA citizens. It comprises Social Security and Medicare taxes and are destined to fund the retired people and to offer to them medical care benefits after they become 65 years old. This tax reaches 15.3% from employee's wage and is payed half by employee and half by employer. Self-employed people must pay the entire percent. Briefly, FICA tax provides financial and medical support for the seniors of USA.

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