Problem 13-39 (LO. 5) During 2020, Greg Cruz works for Maple Corporation and Gray Company. He earns $96,000 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. a. Calculate the overwithholding FICA tax credit for Greg. Feedback Check My Work Employment taxes include FICA (Federal Insurance Contributions Act) and FUTA (Federal Unemployment Tax Act). The employer usually is responsible for withholding the employee's share of FICA (commonly referred to as Social Security tax) and appropriate amounts for income taxes. b. Complete the letter to Greg. Young, Nellen, Raabe, Hoffman, & Maloney, CPAs 5191 Natorp Boulevard Mason, OH 45040 January 16, 2021 Mr. Greg Cruz 1401 Orangedale Road Troy, MI Dear Mr. Cruz: This letter is in response to your questions concerning the possible overwith holding of FICA taxes on the salaries you earned during the year. It is our understanding that during 2020, you earned $95,000 at Maple Corporation and $54,000 at Gray Company, from which they withheld s 7,344 and s 4,131 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 s x , at the rate of 6.2%; and the Medicare portion of the FICA tax at the rate of 1.45%. 763 However, you are obligated to pay FICA tax on the Social Security portion only up to the maximum annual base of s On your income tax return for 2020, you claim a refund to the extent of the excess Social Security withheld by your employers. That excess amount is s Should you need more information or need clarification of our conclusions, please contact me. Sincerely yours, Padma Powers, CPA C. Complete the tax memo regarding Greg's tax issue. TAX FILE MEMORANDUM DATE: January 15, 2021 FROM: Padma Powers SUBJECT: Mr. Greg Cruz Excess FICA tax withheld on salaries earned During 2020, Greg Cruz earned $95,000 at Maple Corporation and $54,000 from Gray Company. Each employer properly withheld FICA tax as follows: Maple Corporation Gray Company . However, Greg is obligated to pay the Social Security portion of Therefore, the total amount withheld was s the FICA only up to the maximum annual base of $ . Thus, Greg has overpaid by $ Problem 13-39 (LO. 5) During 2020, Greg Cruz works for Maple Corporation and Gray Company. He earns $96,000 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. a. Calculate the overwithholding FICA tax credit for Greg. Feedback Check My Work Employment taxes include FICA (Federal Insurance Contributions Act) and FUTA (Federal Unemployment Tax Act). The employer usually is responsible for withholding the employee's share of FICA (commonly referred to as Social Security tax) and appropriate amounts for income taxes. b. Complete the letter to Greg. Young, Nellen, Raabe, Hoffman, & Maloney, CPAs 5191 Natorp Boulevard Mason, OH 45040 January 16, 2021 Mr. Greg Cruz 1401 Orangedale Road Troy, MI Dear Mr. Cruz: This letter is in response to your questions concerning the possible overwith holding of FICA taxes on the salaries you earned during the year. It is our understanding that during 2020, you earned $95,000 at Maple Corporation and $54,000 at Gray Company, from which they withheld s 7,344 and s 4,131 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 s x , at the rate of 6.2%; and the Medicare portion of the FICA tax at the rate of 1.45%. 763 However, you are obligated to pay FICA tax on the Social Security portion only up to the maximum annual base of s On your income tax return for 2020, you claim a refund to the extent of the excess Social Security withheld by your employers. That excess amount is s Should you need more information or need clarification of our conclusions, please contact me. Sincerely yours, Padma Powers, CPA C. Complete the tax memo regarding Greg's tax issue. TAX FILE MEMORANDUM DATE: January 15, 2021 FROM: Padma Powers SUBJECT: Mr. Greg Cruz Excess FICA tax withheld on salaries earned During 2020, Greg Cruz earned $95,000 at Maple Corporation and $54,000 from Gray Company. Each employer properly withheld FICA tax as follows: Maple Corporation Gray Company . However, Greg is obligated to pay the Social Security portion of Therefore, the total amount withheld was s the FICA only up to the maximum annual base of $ . Thus, Greg has overpaid by $