Question

Samantha Montgomery (age 42) is employed by Canon Company and is paid an annual salary of $62,430. She has just decided to join the company's Simple Retirement Account (IRA form) and has a few questions. Answer the following for Montgomery a. What is the maximum that she can contribute into this retirement fund? 12,500 b. What would be the company's contribution? 1,872.0 Note: For items c. & d. below, round interim amounts to two decimal places. Use these values in subsequent computations then round final answer to two decimal places e. what would be her weekly take-home pay with the retirement contribution deducted (married, 2 allowances, wage-bracket method, and a 2.3% state income tax on total wages)? Click here to access the Wage-Bracket Method Tables. 932.61 X d. What would be her weekly take-home pay without the retirement contribution deduction? 1000.65||

tax year 2018

Answer 1

Ans 1.
			Annual	Total Weeks	Per Week	Tax 2.3%	Net
	Total Wages	a	$ 62,430.00	52	$   1,200.58	27.61	$ 1,172.96
	Retirement Fund	b	$ 12,500.00	52	$      240.38	-	$     240.38
	Balance	(a-b)	$ 49,930.00	52	$      960.19		$     932.58
	Wage Bracket Method Tables for Income Tax Withholding for Married, 2 allowance
	Wages Bracket	Number of Allowance
		0	1	2
	1,195 1,205	$       110.00	$        100.00	$            91.00
	So Net Take Home
	Net Salary post Tax and Retirement Fund			$         932.58
	Less: Withhold			$            91.00
	Net Take Home			$         841.58
Ans 2	Net Take Home without Retirement Contribution
		Annual	Total Weeks	Per Week	Tax 2.3%	Net
	Total Wages	$ 62,430.00	52	$      1,200.58	27.61	$ 1,172.96
	Net wages	$   1,172.96
	Less: Withhold	$         91.00
	Net Take Home without Retirement Contribution	$   1,081.96