During 2023, Greg Cruz works for Maple Corporation and Gray Company. He earns $116,000 at Maple Corporation, where he is a full-time employee. Greg also works part-time for Gray Company for wages of $54,000.

If required, round your answers to nearest dollar.

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a. Calculate the overwithholding FICA tax credit for Greg. $fill in the blank a12b40fd4fb9036_1

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b. Complete the letter to Greg.

SWFT, LLP 5191 Natorp Boulevard Mason, OH 45040

January 16, 2024

Mr. Greg Cruz 1401 Orangedale Road Troy, MI 48084

Dear Mr. Cruz:

This letter is in response to your questions concerning the possible overwithholding of FICA taxes on the salaries you earned during the year.

It is our understanding that during 2023, you earned $116,000 at Maple Corporation and $54,000 at Gray Company, from which they withheld $fill in the blank fc2b6901806d044_1 and $fill in the blank fc2b6901806d044_2 of FICA taxes, respectively. Each employer acted properly in withholding the required FICA taxes from the salaries paid: the Social Security portion of the FICA tax, up to $fill in the blank fc2b6901806d044_3, at the rate of 6.2%; and the Medicare portion of the FICA tax at the rate of 1.45%.

However, you are obligated to pay FICA tax on the Social Security portion only up to the maximum annual base of $fill in the blank fc2b6901806d044_4. On your income tax return for 2023, you

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claim a refund to the extent of the excess Social Security withheld by your employers. That excess amount is $fill in the blank fc2b6901806d044_6.

Should you need more information or need clarification of our conclusions, please contact me.

Sincerely yours,

Padma Powers, CPA Partner

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c. Complete the tax memo regarding Greg's tax issue.

TAX FILE MEMORANDUM

DATE: January 15, 2024

FROM: Padma Powers

SUBJECT: Mr. Greg Cruz Excess FICA tax withheld on salaries earned

During 2023, Greg Cruz earned $116,000 at Maple Corporation and $54,000 from Gray Company. Each employer properly withheld FICA tax as follows:

Maple Corporation	$fill in the blank 940f3afed045f95_1
Gray Company	$fill in the blank 940f3afed045f95_2

Therefore, the total amount withheld was $fill in the blank 940f3afed045f95_3. However, Greg is obligated to pay the Social Security portion of the FICA only up to the maximum annual base of $fill in the blank 940f3afed045f95_4. Thus, Greg has overpaid by $fill in the blank 940f3afed045f95_5.