Answer:
a. As per the relevant provisions of IRS, the maximum amount of contribution that can be made to Simple Retirement Account (IRA form) for the year 2016 by an employee is $12,500
b. The maximum amount of contribution that can be made to the Simple Retirement Account according to the provisions of IRS (2016) by the company is 3% of total compensation earned by the employee. So the total amount of company's contribution would be $1290.12 ($43,004*3%).
c. Weekly Pay (43,004/52) 827
Less: Weekly Retirement Contribution <u>240.38</u> (12,500/52)
Weekly Wages 586.62
Less
FICA Tax (827*6.2% + 827*1.45%) 63.2655
Federal Income Tax (Refer to Weekly 58
Wage Table for Married Persons, Column
for 2 Allowances)
State Income Tax (827*2.3%) <u>19.021</u>
Weekly Take Home Pay <u>$446.33</u>
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d. Weekly Pay (43,004/52) 827
Less: FICA Tax (827*6.2% + 827*1.45%) 63.2655
Federal Income Tax (Refer to Weekly 58
Wage Table for Married Persons,
Column for 2 Allowances)
State Income Tax (827*2.3%) <u>19.021</u>
Weekly Take Home Pay <u>$686.71</u>