Question

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $128,400 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to its employee. Gross Pay through August 31 Gross Payfor September
A. $5,900
B. 3,400
C.123,500
a. $1,400
b. 3,500
c. 9,400
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
September Earnings Subject to Tax Tax Rate Tax Amount
Federal income tax $80.00
FICA—Medicare
FICA—Social Security

Answer 1

Answer:

            Gross Pay through August 31            Gross Pay for September

A.                  $5,900                                                    $1,400

B.                  $3,400                                                   $3,500

C.              $123,500                                                   $9,400

For A)

Taxes to be withheld from employee:

FICA - Social Security  = $1,400 x 6.2% = $86.80

FICA - Medicare  = $1,400 x 1.45% = $20.30

Taxes to be paid by employer:

FICA - Social Security  = $1,400 x 6.2% = $86.80

FICA - Medicare  = $1,400 x 1.45% = $20.30

FUTA  = ($7,000 - $5,900) x 0.6% = $6.60

SUTA = ($7,000 - $5,900) x 5.4% = $59.40

B)

Taxes to be withheld from employee:

FICA - Social Security  = $3,500 x 6.2% = $217

FICA - Medicare  = $3,500 x 1.45% = $50.75

Taxes to be paid by employer:

FICA - Social Security  = $3,500 x 6.2% = $217

FICA - Medicare  = $3,500 x 1.45% = $50.75

FUTA  = $00 x 0.6% = $21

SUTA = $3,500 x 5.4% = $189

C)

Taxes to be withheld from employee:

FICA - Social Security  = ($128,400 - $123,500) x 6.2% = $303.80

FICA - Medicare  = $9,400 x 1.45% = $136.30

Taxes to be paid by employer:

FICA - Social Security  = ($128,400 - $123,500) x 6.2% = $303.80

FICA - Medicare  = $9,400 x 1.45% = $136.30

FUTA  = $0

SUTA = $0