Question
Jim Push, a manager for Marvy Co., has weekly earnings subject to deductions for Social Security, Medicare, and FIT. Before this payroll, Jim has earned
Jim Push, a manager for Marvy Co., has weekly earnings subject to deductions for Social Security, Medicare, and FIT. Before this payroll, Jim has earned $137,000 and is therefore $700 below the maximum level for Social Security. What will his net pay be if he earns $2,700 this week? Jim is married and claims one exemption. Use the percentage method. Assume a FICA tax rate of 6.2%. The maximum amount of income subject to Social Security tax in the year 2020 is $137,700.
Please show all of the steps that you used to calculate and the amounts for the following:
- Social Security
- Medicare
- FIT
- Net Pay
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