Use (a) the percentage method and (b) the wage-bracket method to compute the federal income taxes to withhold from the wages or salaries of each employee. Enter all amounts as positive numbers. Round your calculations and final answers to the nearest cent. As we go to press, the federal income tax rates for 2021 are being determined by budget talks in Washington and not available for publication. For this edition, the 2020 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2020 FICA rates have been used. Click here to access the Percentage Method Tables. Click here to access the Wage-Bracket Method Tables. Amount to Be Withheld No. of Filing Withholding Gross Wage Percentage Wage-Bracket Employee Status Allowances or Salary Method Method Lennon, A. HH N/A $675 weekly $ 0 X $ 0 X Starr, P. MFJ N/A 1,929 weekly 0 X 0 X McNeil, S. MFJ N/A 1,775 biweekly 0 X 0 X Harrison, W. MFJ N/A 2,580 semimonthly 0 X 0 X Smythe, M. HH N/A 5,380 monthly 0 X 0 X
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For each employee, first calculate gross pay. Then determine taxable income used to calculate federal income tax withholding, Social Security tax, and Medicare tax. NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation. 1. An employee works 37 regular hours during a workweek in August of 2018. He was hired four years ago, earns a salary of $135,100/year, and is exempt from the overtime provisions of the FLSA. To date, he has received no compensation beyond his annual salary. He has requested that his employer withhold 8% of gross pay, which is to be contributed to a 401(k) plan. Taxable income for federal income tax withholding = $ ? Taxable income for social security tax = $ ? Taxable income for Medicare tax = $ ? 2. An employee works 50 hours (50 - 40 were overtime hours) during a workweek in December of 2018. He earns $9,500/month, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $109,700 during the year. He has requested that his employer withhold 13% of gross pay to contribute to a 403(b) plan. Taxable income for federal income tax withholding = $ ? Taxable income for social security tax = $ ? Taxable income for Medicare tax = $ ?
Adi S.
For each employee listed, use the wage-bracket method to calculate federal income tax withholding, assuming that each has submitted a pre-2020 Form W-4. Then calculate both the state income tax withholding (assuming a state tax rate of 5.0% of taxable pay, with taxable pay being the same for federal and state income tax withholding), and the local income tax withholding. Refer to Publication 15-T. NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation. 1: Jay Monroe (single; 2 federal withholding allowances) earned weekly gross pay of $1,145. For each period, he makes a 401(k) retirement plan contribution of 12% of gross pay. The city in which he works (he lives elsewhere) levies a tax of 2% of an employee's taxable pay (which is the same for federal and local income tax withholding) on residents and 1.7% of an employee's taxable pay on nonresidents. Federal income tax withholding = $ State income tax withholding = $ Local income tax withholding = $ 2: Gus Damon (married; 9 federal withholding allowances) earned weekly gross pay of $1,200. He contributes $125 to a flexible spending account during the period. The city in which he lives and works levies a tax of 3% of an employee's taxable pay (which is the same for federal and local income tax withholding) on residents and 0.40% of an employee's taxable pay on nonresidents. Federal income tax withholding = $ State income tax withholding = $ Local income tax withholding = $ 3: Kenneth Riley (single; 0 federal withholding allowances) earned weekly gross pay of $1,000. For each period, he makes a 403(b) retirement plan contribution of 5% of gross pay. The city in which he lives and works levies a tax of 1.7% of an employee's taxable pay (which is the same for federal and local income tax withholding) on both residents and nonresidents. Federal income tax withholding = $ State income tax withholding = $ Local income tax withholding = $ 4: Ross McMichael (married; 2 federal withholding allowances) earned weekly gross pay of $970. He pays $60 to a cafeteria plan during the period. The city in which he works levies a tax of $8/week on employees who work within city limits. Federal income tax withholding = $ State income tax withholding = $ Local income tax withholding = $
Akash M.
Use the 2016 FICA tax rates, shown below, to answer the following question. If a taxpayer is self-employed and earns $156,000, what are the taxpayer's FICA taxes? Employee's Rates 7.65% on first $118,500 of income 1.45% of income in excess of $118,500 Matching Rates Paid by the Employer 7.65% on first $118,500 paid in wages 1.45% of wages paid in excess of $118,500 Self-Employed Rates 15.3% on first $118,500 of net profits 2.9% of net profits in excess of $118,500 The FICA taxes are $ . (Type an integer or a decimal. Round to the nearest cent as needed.)
Oluwadamilola A.
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