Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sky Company employed Tom Mills in Year 1. Tom earned $5,800 per month and worked the entire year. Assume the Social Security tax rate
Sky Company employed Tom Mills in Year 1. Tom earned $5,800 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $130,000 of earnings, and the Medicare tax rate is 1.5 percent. Tom's federal income tax withholding amount is $930 per month. Use 5.4 percent for the state unemployment tax rate and 0.6 percent for the federal unemployment tax rate on the first $7,000 of earnings per employee. Required a. Answer the following questions: 1. What is Tom's net pay per month? 2. What amount does Tom pay monthly in FICA taxes? 3. What is the total payroll tax expense for Sky Company for January. Year 1? February, Year 1? March, Year 1? December, Year 1? b. Assume that instead of $5,800 per month Tom earned $11,500 per month. Based on this new level of income Tom's new federal income tax withholding is $1,800. Answer the following questions. 1. What is Tom's net pay per month? 2. What amount does Tom pay monthly in FICA payroll taxes? 3. What is the total payroll tax expense for Sky Company for January, Year 1? February, Year 1? March, Year 1? December, Year 1? Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required A3 Required B1 Required B2 Required B3 Assume that instead of $5,800 per month Tom earned $11,500 per month. Based on this new level of income Tom's new federal income tax withholding is $1,800. What is Tom's net pay? Note: Round your answers to 2 decimal places. January to November (per month) Net Pay December
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