Calculate the Social Security and Medicare tax that would be applied to an annual salary of $235,430. Use $106,800 for maximum taxable earnings.

Social Security tax is limited to the maximum taxable earnings: $106,800 × 6.2% = $6,621.60. Medicare tax applies to the full salary: $235,430 × 1.45% = $3,413.735, or about $3,413.74. Choice D gives those amounts, with the Medicare figure rounded to the nearest ten cents.

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