Learning Objective $4$

Learning Objective $5$

Example $3-2$

Wallington Company has $100$ employees, each earning $$525\mathrm{.}25$ a week.

OASDI

Amount of OASDI tax withheld from each employee's paycheck each week:

$$32\mathrm{.}57$

$(6\mathrm{.}2\%$$$525\mathrm{.}25)$

Total tax withheld from the $100$ employees' wages:

$$3,257\mathrm{.}00,($$$32\mathrm{.}57100)$

Tax on employer:

$$3,256\mathrm{.}55$

$6\mathrm{.}2\%($$$525\mathrm{.}25100)$

HI

Amount of HI tax withheld from each employee's paycheck each week:

$$7\mathrm{.}62$

$(1\mathrm{.}45\%$$$525\mathrm{.}25)$

Total tax withheld from the $100$ employees' wages is:

$$762\mathrm{.}00$

$($$$7\mathrm{.}62100)$

Tax on employer:

$$761\mathrm{.}61$

$1\mathrm{.}45\%($$$525\mathrm{.}25100)$

Example $3-6$

On Friday, May $24,20--,$ Rogers, Ltd$.,$ a semiweekly depositor, pays wages and accumulates employment taxes. Rogers makes a deposit on Wednesday, May $29,$ in the amount of $$4,000.$ Later it was determined that Rogers was actually required to deposit $$4,080$ by Wednesday.

Rogers has a shortfall of $$80.$ The shortfall is less than the greater of $$100$ or $2\%$ of the amount required to be deposited. Therefore, Rogers satisfies the safe harbor rule so long as the $$80$ shortfall is deposited by Wednesday, June $19.$

$2.$ On Friday, October $4,20--,$ Vargan Company, a semiweekly depositor, pays wages and accumulates employment taxes. Vargan makes a deposit of $$30,000$ but later finds that the amount of the deposit should have been $$32,000.$

The $$2,000$ shortfall $($$$32,000-$$$30,000)$ exceeds the greater of $$100$ or $2\%$ of the amount required to be deposited $)=($$$640.$

Thus, the safe harbor rule was not met. As a result, Vargan is subject to a failure$-$to$-$deposit penalty, as described later in this chapter.

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Learning Objective $4$

Learning Objective $5$ taxes for Hamilton Company $($EIN $00-0001462),$ semiweekly depositor, for the first quarter of $20--$ follow. Hint: To calculate liability for by FICA rate $[$to get employer's share of FICA$].$ Then add employee's withholding OASDI, HI and FIT.

$\backslash$table$[[\backslash$table$[[$Semimonthly$],[$Paydays$]],\backslash$table$[[$Gross and$],[$Taxable Wages$]],\backslash$table$[[$FICA Withheld$],[$OASDI$]],\backslash$table$[[$FICA Withheld$]],\backslash$table$[[$Federal Income$],[$Tax Withheld$]]],[\frac{1}{15},$$$34,200,$$$2,120\mathrm{.}40,$$$495\mathrm{.}90,$$$4,180\mathrm{.}00$