In: Accounting
Prior to the current period, Sol Berenson, has earnings subject
to FICA
Tax of $126,700. During the current week, Sol has gross earnings
of
$1,900. How much FICA tax is owed by Sol for this period?
1.$58.55
2.$27.55
3.$31
Which of the following statements regarding Social Security tax
is
false?
1.Social Security tax was first levied on employees in 1937.
2.All earnings of an employee that exceed the taxable wage base in
a
single year are not subject to Social Security tax.
3.Social Security tax is also referred to as OASDI tax because it
was
initially established to benefit retired employees, survivors
of
employees, and disabled employees.
Which of the following was not a result of The Current Tax
Payment Act
of 1943?
1.Use of a pay-as-you-go system
2.Employer withholding of federal income tax
3.One increased federal income tax withholding rate that was consistent for all employees
Question = Prior to the current period, Sol Berenson, has earnings subject to FICA Tax of $126,700. During the current week, Sol has gross earnings of $1,900. How much FICA tax is owed by Sol for this period?
Answer = Option 2 $27.55 is owed by Sol for this period
Option1.$58.55
Option 2.$27.55 because amount of medicare is
equal to $27.55(1900*1.45%)
Multiply the current Medicare tax rate by the amount of gross
wages subject to Medicare. Check to see if the employee has reached
the additional Medicare tax level and increase deductions from the
employee's pay. The 0.9% additional Medicare tax must be deducted
when the employee's wages reach $200,000 each year, and the
additional amount is calculated on only the amount over
$200,000
Option 3.$31
Question = Which of the following statements regarding Social Security tax is false?
Answer = Option 1 is false and explanation for the same as given below.
Option1.Social Security tax was first levied on employees in 1937 but
Social Security taxes were first collected in January 1937,with workers and employers (both) each paying 1% of the first $3,000 in wages and salary. Hence workers also include so above statement is False.
Option 2. All earnings of an employee that exceed the taxable wage base in a single year are not subject to Social Security tax. This is true. For instances earnings in 2020, the maximum amount of income that taxpayers must pay Social Security tax on is $137,700. In other words, the taxable wage base is $137,700.
Assume Sue, earns $175,000 gross income. The Social Security tax rate will only be applied up to the taxable wage base of $137,700, which is less than her gross income. Therefore, Sue will pay 6.2% x $137,700 = $8,537.40 as her contribution to the country’s Social Security account for retirees and the disabled.
Option 3. Social Security tax is also referred to as OASDI tax because it was initially established to benefit retired employees, survivors of employees, and disabled employees.because of that millions of Americans receive each year from the Social Security Administration.So this is true
Question = Which of the following was not a result of The Current Tax Payment Act of 1943?
Answer = Option 3 was not a result of The Current Tax Payment Act of 1943.
Option1. "Use of a pay-as-you-go system" was a result of the Current Tax Payment Act of 1943 because Act introduced the pay-as-you-go income tax, in which a sum of money is withheld by an employer from an employee's paycheck each pay period in accordance with tax liability. Prior to the pay-as-you-go system, American workers paid an annual lump sum tax payment.
Option 2. Employer withholding of federal income tax was a
result of the Current Tax Payment Act of 1943 because the
Current Tax Payment Act compelled employers to
withhold federal income taxes from workers'
paychecks and pay them directly to the government
on the workers' behalf.
Only at the time of the act, Social Security payments and a World War II Victory Tax were already being withheld
Option 3. One increased federal income tax withholding rate that was consistent for all employees was not a result of the Current Tax Payment Act of 1943 because impact of that is already in effect so there is no any extra benefit arise & this is not the result of the Current Tax Payment Act of 1943