During 2020, Juan Gonzalez, president of Acme Inc. was paid a semimonthly salary of $6,100. Computer...

During 2020, Juan Gonzalez, president of Acme Inc. was paid a semimonthly salary of $6,100. Computer the amount of FICA taxes that should be withheld from him.

A. 9th paycheck
B. 22nd paycheck
C. 24th paycheck
D. If Juan's year to date earnings as of his 24th paycheck are $146,400 and his year-end bonus is $100,00, how much is the additional HI tax withheld?

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Expert Solution

SEMI MONTHLY SALARY

YEARLY SALARY $ 6100 *24 = $ 146,400

FICA TAX WITH HELD FOR FIRST PAYCHECK WILL BE $ 6100 * 7.65 % =$ 466.65

A. 9th paycheck : 466.65*9 = $ 4194

b. 22 nd paycheck : 466.65*22 =$ 10,266.3

c.24 th paycheck : $ 10660 (w.n.1)

d. Juan's additional HI tax withheld: $200000-$146400=$53600*1.45%=$ 777.2

above $ 2,00,000 *2.35 % ($ 246400- $200000)=46400 *2.35% =$ 1090.4

( $ 777.2+ $ 1090.4) =$1867.6

additional medicare tax effect of 0.9% will be $ 46,400*0.9 %=$ 417.6

w.n.1

the maximum social security amount is $8537.40

+ medicare tax on $ 146,400 *1.45% $2,122.28

so the 24 th paycheck withheld amount will be ($8537.40+$2122.25)=$ 10660

w.n2

additional medicare tax 0.9% is applicable on amount above $ 2,00,000

so additional HI tax withheld on $ 46,400 *0.9 % = $417.6

notes

1)7.65 rate bifurcation is social security 6.2 % + medicare tax 1.45 %

2) 24 times because salary is paid by semi monthly

3) 2.35 % bifurcation is 1.45% +0.9% medicare tax

ekkarill92 answered 1 month ago

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