Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, use the following rates, ceiling, and maximum taxes. Employee and
Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, use the following rates, ceiling, and maximum taxes.
Employee and Employer OASDI: | 6.20% | $118,500 | $7,347 |
Employee* and Employer HI: | 1.45% | No limit | No maximum |
Self-employed OASDI: | 12.4% | $118,500 | $14,694 |
Self-employed HI: | 2.9% | No limit | No maximum |
1. | Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the over-time rate). | ||
2. | If the third decimal place is 5 or more, round to the next higher cent. | ||
3. | If the third decimal place is less than 5, simply drop the third decimal place. | ||
Examples: | Monthly rate $1,827 Weekly rate ($1,827 12)/52 = $421.615 rounded to $421.62 Hourly rate $421.62/40 = $10.540 rounded to $10.54 O.T. rate $10.54 1.5 = $15.81 |
Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. | |||
*Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. |
Example 3-1
During 2017, Matti Conners, president of Maggert Company, was paid a semimonthly salary of $5,470. Compute the amount of FICA taxes that should be withheld from her. If an amount is zero, enter "0".
OASDI | HI | |
a. 9th paycheck | $ | $ |
b. 22nd paycheck | $ | $ |
c. 24th paycheck | $ | $ |
d. If Matti Conners year-to-date earnings as of her 24th paycheck are $131,280 and her year-end bonus is $100,000, how much is the additional 0.9% HI tax withheld? |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started