Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculating Social Security and Medicare Taxes Issume a Social Security tax rate of 6.2% is applied to maximum earnings of $128,400 and a Medicare tax

image text in transcribed Calculating Social Security and Medicare Taxes Issume a Social Security tax rate of 6.2% is applied to maximum earnings of $128,400 and a Medicare tax rate of 1.45% is applied to all earnings. Calculate the Soci Security and Medicare taxes for the following situations: f required, round your answers to the nearest cent. Feedback Check My Work - If the year-to-date earnings $128,400 then none of the current earnings are subject to Social Security Tax. - If Year-to-Date Earnings partially extend beyond the OASDI cap ($128,400), then a portion of the Current Gross Pay is subject to Social Security Tax. For example, assume that Cumulative Pay Before Current Weekly Payroll is $126,125 and that current gross pay is $6,000. Year-to-date earnings would be $132,125($126,125+$6,000). The amount over the social security maximum would be $3,725 ( $132,125$128,400). The amount amount subject to Social Security tax is difference between the OASDI cap ($128,400) and Cumulative Pay Before Current Weekly Payroll of $126,125, or $2,275a. Thus the amount Subject to Soc. Sec. is $2,275, taxed at the OASDI rate of 6.2% which equals $141.05 a Note: Your check figure is $3,725+$2,275=$6,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Value Based Management Context And Application

Authors: Glen Arnold, Matt Davies

1st Edition

0471899860, 978-0471899860

More Books

Students also viewed these Accounting questions