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 | HI | FIT | SIT | | | | |
| $37,450.00 | $2,321.90 | $543.06 | $3,402.00 | $2,621.50 | | | | |
| 6.a. Employers OASDI | $2,321.90 | _______ | __________ | _________ | | | | |
| 6.b. Employers HI | 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 | CLARKES ROOFING |
| Month Tax Year Ends | 12 | Amount of Deposit | |
| Type of Tax (Form) | | Tax Period | |
| Address | 20 SUMMIT SQUARE | Phone Number | (501) 555-1212 |
| City, State, ZIP | CITY, STATE 00000-0000 | | |
To be deposited on or before .
| FEDERAL DEPOSIT INFORMATION WORKSHEET |
| Employer | | | |
| Identification Number | 00-0004701 | Name | CLARKE'S ROOFING |
| Month Tax Year Ends | 12 | Amount of Deposit | |
| Type of Tax (Form) | | Tax Period | |
| Address | 20 SUMMIT SQUARE | Phone Number | (501) 555-1212 |
| City, State, ZIP | CITY, STATE 00000-0000 | | |
To be deposited on or before .
| FEDERAL DEPOSIT INFORMATION WORKSHEET |
| Employer | | | |
| Identification Number | 00-0004701 | Name | CLARKE'S ROOFING |
| Month Tax Year Ends | 12 | Amount of Deposit | |
| Type of Tax (Form) | | Tax Period | |
| Address | 20 SUMMIT SQUARE | Phone Number | (501) 555-1212 |
| City, State, ZIP | CITY, STATE 00000-0000 | | |
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
| Form941 for 20--: (Rev. January 2016) | Employer's QUARTERLY Federal Tax Return Department of the Treasury Internal Revenue Service | | OMB No. 1545-0029 | | Employer identification number (EIN) | | | Name (not your trade name) | CLARKE'S ROOFING | | | | | Address | | | | | Number | Street | Suite or room number | | | | | | | | | | | | | | Foreign country name | | Foreign province/county | | Foreign postal code | | | | | | | Report for this Quarter of 20-- (Select one.) | | Instructions and prior year forms are available at www.irs.gov/form941. | | | | 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) | 1 | | | 2 | Wages, tips, and other compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2 | | | 3 | Federal income tax withheld from wages, tips, and other compensation . . . . . . . . . . . . . . . . . . . . . . . . . | 3 | | | 4 | If no wages, tips, and other compensation are subject to social security or Medicare tax | | Check and go to line 6. | | | | Column 1 | | Column 2 | | | 5a | Taxable social security wages . . . . . | | x .124 = | | | | 5b | Taxable social security tips . . . . . . . . | | x .124 = | | | | 5c | Taxable Medicare wages & tips . . . . . | | x .029 = | | | | 5d | Taxable wages & tips subject to Additional Medicare Tax withholding | | x .009 = | | | | | 5e | Add Column 2 from lines 5a, 5b, 5c, and 5d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 5e | | | 5f | Section 3121(q) Notice and DemandTax due on unreported tips (see instructions) . . . . . . . . . . . . . . . | 5f | | | 6 | Total taxes before adjustments. Add lines 3, 5e, and 5f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6 | | | 7 | Current quarter's adjustment for fractions of cents Hint: Work 941 through line 6, then go down to line 10 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". | 7 | | | 8 | Current quarter's adjustment for sick pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 8 | | | 9 | Current quarter's adjustments for tips and group-term life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . | 9 | | | 10 | Total taxes after adjustments. Combine lines 6 through 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 10 | | | 11 | Total deposits for this quarter, including overpayment applied from a prior quarter and overpayments applied from Form 941-X, 941-X (PR), 944-X, or 944-X (SP) filed in the current quarter . . | 11 | | | 12 | Balance due. If line 10 is more than line 11, enter the difference and see instructions . . . . . . . . . . . . . . . . . . . . | 12 | | | 13 | Overpayment. If line 11 is more than line 10, enter the difference Check one: Apply to next return. Send a refund. | | 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. | Cat. No. 17001Z | Form 941 (Rev. 1-2016) | |
| Name (not your trade name) | Employer identification number (EIN) | | CLARKE'S ROOFING | 00-0004701 | | 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 depositor, see section 11 of Pub. 15. | | | 14 Check one: | | | a. | Line 10 on this return is less than $2,500 or line 10 on the return for the prior quarter was less than $2,500, and you did not incur a $100,000 next-day deposit obligation during the current quarter. If line 10 for the prior quarter was less than $2,500 but line 10 on this return is $100,000 or more, you must provide a record of your federal tax liability. If you are a monthly schedule depositor, complete the deposit schedule below: if you are a semiweekly schedule depositor, attach Schedule B (Form 941). Go to Part 3. | | b. | You were a monthly schedule depositor for the entire quarter. Enter your tax liability for each month and total 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 Schedule B (Form 941), Report of 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. | | 15 | | If your business has closed or you stopped paying wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Check here, and | | 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 . . . . . . . . . . . . . . . . . Check here. | | 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 the IRS? See the instructions for 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 statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. | | | | | | | | | Date | 1/31/18 | | Best daytime phone | 501-555-1212 | | | Paid Preparer Use Only | Check if you are self-employed . . . . | | Preparer's name | | PTIN | | | | Preparer's signature | | Date | | | Firm's name (or yours if self-employed) | | EIN | | | Address | | Phone | | | City | | | ZIP code | | | | | | | | | | Page 2 | Form 941 (Rev. 1-2016) Source: Internal Revenue Service | |
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 | (DO NOT WRITE IN THIS SPACE) | | | IMPORTANT, PLEASE REFER TO THIS NUMBER IN ANY CORRESPONDENCE | WITHHOLDING IDENTIFICATION NUMBER | MONTH OF OR QUARTER ENDING | | | 00-0-8787 | DEC. 20-- | | | | | 1. | GROSS PAYROLL THIS PERIOD | $ | | | | | | | IF YOU ARE A SEASONAL EMPLOYER AND THIS IS YOUR FINAL REPORT FOR THIS | | | CLARKES ROOFING 20 SUMMIT SQUARE CITY, STATE 00000-0000 | | 2. | STATE INCOME TAX WITHHELD | $ | | SEASON, CHECK HERE | | | AND SHOW THE NEXT MONTH IN WHICH YOU WILL PAY WAGES | 3. | ADJUSTMENT FOR PREVIOUS PERIOD(S). (ATTACH STATEMENT) | $ | | | | | | | | | | 4. | TOTAL ADJUSTED TAX (LINE 2 PLUS OR MINUS LINE 3) | $ | | | IF NAME OR ADDRESS IS INCORRECT, PLEASE MAKE CORRECTIONS. THIS REPORT MUST BE RETURNED EVEN IF NO AMOUNT HAS BEEN WITHHELD | | 5. | PENALTY (35% OF LINE 4) | $ | | | 6. | INTEREST | $ | | Under penalties proscribed by law, I hereby affirm that to the best of my knowledge and belief this return, including any 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. | 7. | TOTAL AMOUNT DUE AND PAYABLE | $ | | SIGNATURE: | STUDENT | TITLE: | President | DATE: | 1/31/18 | | MAIL THIS REPORT WITH CHECK OR MONEY ORDER PAYABLE TO 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 Federers 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 DAmico. In addition, it wants the net bonus payment to equal $4,000. Assuming DAmico is still under the OASDI/FICA limit, the calculation would be:
| A. | $4,000 |
| 10.25 (supplemental W/H rate)0.062 (OASDI)0.0145 (HI) |
| B. | $4,000 | = $5,939.12 grossed-up bonus |
| 0.6735 |
| C. | Gross bonus amount | $5,939.13* |
| | Federal Income Tax withheld | 1,484.78 |
| | OASDI tax withheld | 368.23 |
| | HI tax withheld | 86.12 |
| | Take-home bonus check | 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? $
