Question

 

36) Eric, an employee of sam’s club, earned $ 120000 in 2016. The taxable wage base in 2016 is $ 118500 How much FICA tax should Eric pay in 2016? Please answer the following two questions ?

A) $9180

b) $9065.25

c) $9087

d) $8789

 

37) How much federal unemployment tax should been on behalf of Eric in 2016 ?

A) $7440

B) $434

C) $7200

D) $420

Answer 1

36. Eric has to pay 7.65% on his total earnings or $118,500, WHICHEVER IS LESS, as Social Security tax and 1.45% of the TOTAL EARNINGS as Medicare.

Hence, his total tax liability = .0765*118,500 + .0145*120,000 = $9,087.

 

37. FUTA rate for 2016 is 6% subject to maximum exemption of 5.4% on total earnings or $7,000, WHICHEVER IS LESS.

Hence, FUTA on behalf of Eric = .06*$7,000 = $420.