Additional questions attached in the word document. 1.Let's look at another colleague of Gloria's, Brock Taylor. Brock earns $11,500 per pay period, and has earned $80,500 up to this point. The OASDI withholding rate is 6.2%, and the current wage limit is $118,500. What will be his OASDI withholding for this pay period?

Part 3. Learning Objective 3: Compute the amount of Federal Income Tax Withheld Federal income tax rates and withholding rates can change on short notice, due to new legislation passed by Congress. In this exercise, you will learn how to use Publication 15, The Employer's Tax Guide (also known as Circular E), to look up the most current tax withholding rates and apply them to several different situations. The most recent version of Publication 15 can be found at the Internal Revenue Service internet site (www.irs.gov), but for this exercise, you will download a copy using the link below. Depending on how your browser is set up, this publication may appear in a new browser tab or window, or it may be downloaded to your computer, and you will have to click on the downloaded file to display it using Adobe Acrobat. Click on the link below, and when you have displayed Publication 15, come back to this exercise. Publication 15 Circular E Employer's Tax Guide https://www.irs.gov/pub/irs-pdf/p15.pdf The Table of Contents for Publication 15 should now be displayed in a separate window or browser tab with the first part showing the Contents. Review this Table of Contents. The part of Publication 15 you will use in this exercise is near the end of the publication, under a section entitled \"17. How To Use the Income Tax Withholding Tables.\" A. To make sure you are on the correct page, what page number is shown for this section? Now go the "17. How To Use the Income Tax Withholding Tables" page, either by clicking on the page link in the document, if it is active, or scrolling down to that page. The first part of this section consists of instructions on how to use the tables. Note also that the table of amounts for each withholding allowance is on this page, and you will need this table in the remaining sections of this exercise. B. Scroll past these instructions to get to the first table page, with the heading \"Percentage Method Tables for Income Tax Withholding.\" To make sure you are on the correct page, what page number is shown on Publication 15 for this table section? Note that each table on this page has a separate section for single and married taxpayers, and there is separate table for each major type of payroll frequency. What is the difference between a biweekly payroll and a semimonthly payroll? Select the definition below that you think best fits each of these scenarios: Scenario 1: Employees are paid twice per month, usually on the 15th of the month and the last day of the month, or on the last business day before these dates. There are always 24 payrolls in any one year. C. What kind of payroll is this? Scenario 2: Employees are paid on the same day of every other week. There are usually two payrolls in a month, but sometimes there are three. There are usually 26 payrolls in a calendar year, but sometimes there are 27. D. What kind of payroll is this? You are now ready to go on to the next section of the exercise. Use the Percentage Method to calculate withholding The most recent version of Publication 15 can be found at the Internal Revenue Service internet site ( www.irs.gov), but for this exercise, you will download a copy using the link below. Depending on how your browser is set up, this publication may appear in a new browser tab or window, or it may be downloaded to your computer, and you will have to click on the downloaded file to display it using Adobe Acrobat. Click on the link below, and when you have displayed Publication 15, come back to this exercise. Withholding for Federal Income Tax can be calculated using one of two methods. The first, covered in this section of the exercise, is the Percentage Method. 1. Jason Federer is married and is entitled to 4 withholding allowances. He is paid a salary of $ 4200 biweekly. 1.a. First, use the Allowance Amount Table on page 42 of Publication 15 to determine that each allowance for Jason Federer is worth $ . 1.b. So this means that he is entitled to withholding allowances totaling $ . 1.c. Subtract this amount from his biweekly pay to determine that Jason Federer's biweekly pay subject to withholding, also called \"excess pay,\" is $ . 1.d. Now calculate his total withholding for the pay period. Look in the Biweekly Percentage Withholding table in Publication 15 for married employees to find that his withholding will be a fixed amount of $ plus % of the excess pay over the range limit of $ 3225. Use the Wage Bracket Method to calculate withholding Learning Objective 3: Compute the amount of Federal Income Tax Withheld The most recent version of Publication 15 can be found at the Internal Revenue Service internet site (www.irs.gov), but for this exercise, you will download a copy using the link below. Depending on how your browser is set up, this publication may appear in a new browser tab or window, or it may be downloaded to your computer, and you will have to click on the downloaded file to display it using Adobe Acrobat. Click on the link below, and when you have displayed Publication 15, come back to this exercise. In this step, you will use the Wage Bracket Method to calculate withholding. In this method, you do not need to calculate withholding allowances, but there are fairly-low limits as to the level of pay that the tables cover. For higher levels of pay you will need to use the Percentage Method from the previous step. 2. Chantell Grayson is single and has elected 2 withholding allowances. She is paid a salary of $2130 twice per month (semimonthly). 2.a. First, find the first table in Publication 15 that applies to single taxpayers paid semimonthly. These tables follow the Percentage Method tables. On which page do you find the first table for this category? 2.b. Now calculate Chantell Grayson's total withholding for the pay period. Search down the first column, looking for the wage bracket that includes her gross semimonthly pay. What is the lower bound of that bracket (\"At least\")? $ 2.c. Finally, scan across this row to find the column that matches the number of allowances that she has elected to claim. At this table intersection, you will find the withholding amount for each semimonthly pay period for Chantell Grayson: $ Example 4-1 Carl Jamison, an employee for the Scharman School, belongs to a tax-deferred retirement plan to which he contributes 3 percent of his pay which is matched by the school. His biweekly pay is $2,500. Because of the deferral (3% $2,500 = $75), $2,425 is subject to federal income tax withholding. 3. Samantha Montgomery (age 42) is employed by Canon Company and is paid a salary of $62,430. She has just decided to join the company's Simple Retirement Account (IRA form) and has a few questions. Answer the following for Montgomery: 3.a. What is the maximum that she can contribute into this retirement fund? $ 3.b. What would be the company's contribution? $ 3.c. What would be her weekly take-home pay with the retirement contribution deducted (married, 2 allowances, wage-bracket method, and a 2.3% state income tax on total wages)? Use the Wage- bracket tables in Publication 15. $ 3.d. What would be her weekly take-home pay without the retirement contribution deduction? $ Example 4-1 Carl Jamison, an employee for the Scharman School, belongs to a tax-deferred retirement plan to which he contributes 3 percent of his pay which is matched by the school. His biweekly pay is $2,500. Because of the deferral (3% $2,500 = $75), $2,425 is subject to federal income tax withholding. 3. Jen Miller made $1,090 this week. Only social security (fully taxable) and federal income taxes attach to her pay. Miller contributes $125 each week to her company's 401(k) plan and has $40 put into her health savings account (nonqualified) each week. Her employer matches this $40 each week. Determine Miller's take-home pay if she is married and claims 2 allowances (use the wagebracket method). Enter deductions beginning with a minus sign (-). Use the Wage- bracket tables in Publication 15. $ 3.a. Gross pay 3.b. HSA contributions 3.c. 401(k) deductions 3.d. OASDI tax 3.e. HI tax 3.f. FIT $ 3.g. Net pay 4. Ernesto Enterprises uses the wage-bracket method to determine federal income tax withholding on its employees. Find the amount to withhold from the wages paid each employee. If an amount is zero, enter "0". Enter all amounts as positive numbers. Use the Wagebracket tables in Publication 15. Employee Marita No. of l Withholding Status Allowances Payroll Period W=Weekly S=Semimonthly Wage Amount to Be Withheld M=Monthly D=Daily 4.a. Ed Boone M 1 W $1,250 4.b. Ray Ortega S 1 W 695 $ 4.c. Carl Lopez S 3 W 915 4.d. Terri Kim M 6 M 5,070 4.e. Kathy Horace M 2 M 3,730 4.f. John Gleam M 8 S 1,200 4.g. Rob Abreu S 1 D 115 4.h. Carmen Sanchez S 4 S 2,040 4.i. Howard Nee M 4 M 4,500 5. 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 deductions beginning with a minus sign (-). Find wage-bracket tables in Publication 15. Find Percentage Tables in Publication 15 Table of Allowance Values for 2016 Weekly 77.90 Quarterl 1,012.50 y Biweekly 155.80 Semiannual 2,025.00 Semimonthly 168.80 Annual 4,050.00 Monthly 337.50 Daily/Misc. 15.60 Amount to Be Withheld Marital Status No .of Withholding Allowances Gross Wage or Salary 5.a. Ruiz, S. S 2 $1,040 weekly 5.b. Flume, X. S 1 2,190 weekly Employee Percentage Method $ Wage-Bracket Method $ N/A 5.c. Farley, H. M 6 1,890 biweekly 5.d. Comey, P. M 4 2,315 semimonthly 5.e. Hanks, R. M 9 4,200 monthly 6. During the fourth quarter of 2017, there were seven biweekly paydays on Friday (October 6, 20; November 3, 17; December 1, 15, 29) for Clarke's Roofing. Using the forms supplied, complete the following for the fourth quarter: Quarterly Payroll Data Total Earnings 5 Employees OASDI $37,450.00 $2,321.90 6.a. Employer's OASDI $2,321.90 _______ 6.b. Employer's HI HI FIT SIT $543.06 $3,402.00 $2,621.50 543.06 __________ 6.c. Federal deposit liability each pay 1,304.56 ________ __________ _________ ___________ __________ ____________ __________ If an amount box does not require an entry enter "0". 6.d. Complete the Federal Deposit Information Worksheets below, reflecting electronic deposits (monthly depositor). The employer's phone number is (501) 555-1212. Federal deposit liability each pay period, $1,304.56. FEDERAL DEPOSIT INFORMATION WORKSHEET Employer Identification Number 00-0004701 Name Month Tax Year Ends 12 Amount of Deposit Type of Tax (Form) CLARKE'S ROOFING Tax Period Address 20 SUMMIT SQUARE City, State, ZIP CITY, STATE 00000-0000 Phone Number (501) 555-1212 To be deposited on or before . FEDERAL DEPOSIT INFORMATION WORKSHEET Employer Identification Number 00-0004701 Name Month Tax Year Ends 12 Amount of Deposit Type of Tax (Form) CLARKE'S ROOFING Tax Period Address 20 SUMMIT SQUARE City, State, ZIP CITY, STATE 00000-0000 Phone Number (501) 555-1212 To be deposited on or before . FEDERAL DEPOSIT INFORMATION WORKSHEET Employer Identification Number 00-0004701 Name Month Tax Year Ends 12 Amount of Deposit Type of Tax (Form) CLARKE'S ROOFING Tax Period Address 20 SUMMIT SQUARE City, State, ZIP CITY, STATE 00000-0000 Phone Number (501) 555-1212 To be deposited on or before . 7. Employer's Quarterly Federal Tax Return, Form 941. The form is signed by you as president on January 31, 2018. You can also access a black Form 941 at www.irs.gov/forms 941 for 20--: Form (Rev. January 2016) Employer's QUARTERLY Federal Tax Return Department of the Treasury Internal Revenue Service Employer identification number (EIN) 0 0 - 0 0 0 4 7 0 1 Name (not your trade CLARKE'S ROOFING name) Instruct availab Trade name (if any) Address 20 SUMMIT SQUARE Number Report (Select Street Suite or room number CITY ST 00000-0000 City State ZIP code Foreign country name Foreign province/county Foreign postal code Read the separate instructions before you complete Form 941. Type or print within the boxes. Part 1: Answer these questions for this quarter. 1 Number of employees who received wages, tips, or other compensation for the pay period including: Mar. 12 (Quarter 1), June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4) 2 Wages, tips, and other compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Federal income tax withheld from wages, tips, and other compensation . . . . . . . . . . . . . . . . . . . . . . . . . 4 If no wages, tips, and other compensation are subject to social security or Medicare tax Column 1 Column 2 5a Taxable social security wages . . . . . x .124 = 5 Taxable social security tips . . . . . . . . b x .124 = 5c Taxable Medicare wages & tips . . . . . x .029 = 5 Taxable wages & tips subject to d Additional Medicare Tax withholding x .009 = 5e Add Column 2 from lines 5a, 5b, 5c, and 5d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5f Section 3121(q) Notice and DemandTax due on unreported tips (see instructions) . . . . . . . . . . . . . . . 6 Total taxes before adjustments. Add lines 3, 5e, and 5f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Current quarter's adjustment for fractions of cents Hint: Work 941 through line 6, then go down to line and calculate quarterly liability by taking amount due for one period times number of pay periods in the quarter. The difference between lines 6 and 10 is the "Adjustment for fraction of cents". 8 Current quarter's adjustment for sick pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Current quarter's adjustments for tips and group-term life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Total taxes after adjustments. Combine lines 6 through 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Total deposits for this quarter, including overpayment applied from a prior quarter and overpayment applied from Form 941-X, 941-X (PR), 944-X, or 944-X (SP) filed in the current quarter . . 12 Balance due. If line 10 is more than line 11, enter the difference and see instructions . . . . . . . . . . . . . . . . . . Overpayment. If line 11 is more than line 10, enter the difference 13 Check one: Apply to n You MUST complete both pages of Form 941 and SIGN it. For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher. Name (not your trade name) Cat. No. Employer identifi CLARKE'S ROOFING Part 2: Tell us about your deposit schedule and tax liability for this quarter. If you are unsure about whether you are a monthly schedule depositor or a semiweekly schedule depos 15. 14 Check one: a. Line 10 on this return is less than $2,500 or line 10 on the return for the prior quart did not incur a $100,000 next-day deposit obligation during the current quarter. If li than $2,500 but line 10 on this return is $100,000 or more, you must provide a record of a monthly schedule depositor, complete the deposit schedule below: if you are a semiwee Schedule B (Form 941). Go to Part 3. b. You were a monthly schedule depositor for the entire quarter. Enter your tax liability for the quarter, then go to Part 3. Tax liability: Month 1 Month 2 Month 3 Total liability for quarter Total must equal line 10. c. You were a semiweekly schedule depositor for any part of this quarter. Complete Sch Tax Liability for Semiweekly Schedule Depositors, and attach it to Form 941. Part 3: Tell us about your business. If a question does NOT apply to your business, leave it blank. If your business has closed or you stopped paying wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 enter the final date you paid wages / / . 16 If you are a seasonal employer and you do not have to file a return for every quarter of the year . . . . . Part 4: May we speak with your third-party designee? Do you want to allow an employee, a paid tax preparer, or another person to discuss this return with t details. Designee's name and phone number Select a 5-digit Personal Identification Number (PIN) to use when talking to the IRS. Part 5: Sign here. You MUST complete both pages of Form 941 and SIGN it. Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and sta knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on has any knowledge. Print your name here Sign your name here Print your title here Date 1/31/18 Best daytime phone 501-555-1212 Check if you are sel Paid Preparer Use Only Preparer's name PTIN Preparer's signature Date Firm's name (or yours if selfemployed) EIN Address Phone State City ZIP code Page 2 8. Employer's Report of State Income Tax Withheld for the quarter, due on or before January 31, 2018. EMPLOYER'S REPORT OF STATE INCOME TAX WITHHELD IMPORTANT, PLEASE REFER TO THIS NUMBER IN ANY CORRESPONDENCE WITHHOLDING IDENTIFICATION NUMBER 00-0-8787 (DO NOT WRITE IN THIS SPACE) MONTH OF OR QUARTER ENDING DEC. 20-1. GROSS PAYROLL THIS PERIOD $ IF YOU ARE A SEASONAL EMPLOYER AND THIS 2. STATE INCOME TAX WITHHELD 3. ADJUSTMENT FOR PREVIOUS PERIOD(S). (ATTACH STATEMENT) IS YOUR FINAL REPORT FOR THIS SEASON, CHECK HERE CLARKE'S ROOFING 20 SUMMIT SQUARE CITY, STATE 00000-0000 AND SHOW THE NEXT MONTH IN WHICH YOU WILL PAY WAGES 4. IF NAME OR ADDRESS IS INCORRECT, PLEASE MAKE CORRECTIONS. 5. PENALTY (35% OF LINE 4) 6. INTEREST 7. TOTAL AMOUNT DUE AND PAYABLE THIS REPORT MUST BE RETURNED EVEN IF NO AMOUNT HAS BEEN WITHHELD Under penalties proscribed by law, I hereby affirm that to the best of my knowledge and belief this return, including any TOTAL ADJUSTED TAX (LINE 2 PLUS OR MINUS LINE 3) accompanying schedules and statements, is true and complete. If prepared by a person other than taxpayer, his affirmation is based on all information of which he has any knowledge. $ $ $ $ $ $ MAIL THIS REPORT WITH CHECK OR MONEY ORDER PAYABL SIGNATURE: STUDENT TITLE: President DATE: 1/31/18 THE DEPT. OF REVENUE ON OR BEFORE DUE DATE TO AVOID PENALTY. Based on this fixed amount and percentage of the amount over the fixed amount, calculate Jason Federer's total biweekly withholding: $ . Round your computations and final answer to the nearest cent. Use rounded computations in subsequent computations. Example 4-10 GROSSING-UP. Cotter Company wants to award a $4,000 bonus to Donna D'Amico. In addition, it wants the net bonus payment to equal $4,000. Assuming D'Amico is still under the OASDI/FICA limit, the calculation would be: $4,000 A. B. C. 1-0.25 (supplemental W/H rate)-0.062 (OASDI)-0.0145 (HI) $4,00 0 0.673 5 = $5,939.12 grossed-up bonus Gross bonus amount Federal Income Tax withheld OASDI tax withheld HI tax withheld Take-home bonus check $5,939.13* 1,484.78 368.23 86.12 4,000.00 If state or local taxes apply, they must also be included in the formula. *Need to add $0.01 to $5,939.12 in order to arrive at $4,000.00 (due to rounding). 9. Harrington Company is giving each of its employees a holiday bonus of $250 on December 15 (a nonpayday). The company wants each employee's net check to be $250. The supplemental tax percent is used. Nobody has capped for OASDI prior to the bonus check. 9.a. What will be the gross amount of each bonus if each employee pays a state income tax of 3.01% (besides the other payroll taxes)? $ 9.b. What would the net amount of each bonus check be if the company did not gross-up the bonus? $