[Dan]

I have been working on this tax problem all day and I am not getting it right. Could someone please tell me what I am doing wrong because I think I am doing everything correct. Below is the portion of the problem and I think this is the part where I am getting the totals wrong. Every time I submit my answer I am getting the total wrong.

Martin received $120,000 in salary from Red Steel Corporation, where he is a construction engineer. Withholding for Federal income tax was $10,750. Amounts withheld for FICA taxes were as follows: $7,049 ($113,700 6:2%) for Social Security and $1,740 ($120,000 1:45%) for Medicare. Martin worked in Mexico from January 1, 2014, until February 15, 2015. His $120,000 salary for 2015 includes $18,000 he earned for January and one-half of February 2015 while working in Mexico.

So he makes 120,000 but worked in Mexico for 46 days. I took 46/365 X the $100,800 cap set on foreign income exclusion and came up with 120,000 – 12,704= 107,296 income.

The FICA and Medicare part sounds like a trick because those taxes are not excluded from income. Am I correct? I can’t figure out why it’s wrong.