Question

Dennis Toby is married with four allowances. He is paid a BIWEEKLY salary of $1,200. He will not reach the maximum taxable salary for Social Security purposes.

1. What is the amount that he will have deducted for Social Security taxes?

2. What is the amount that he will have deducted for Medicare taxes?

3. Using the percentage method, what is the amount that he will have deducted for FIT (Federal Income Tax)?

4. What is his net pay?

SOCIAL SECURITY TAX RATE: 6.2% MEDICARE TAX RATE: 1.45% MAXIMUM TAXABLE SALARY: $110,100 Payroll Period Weekly Biweekly Semimonthly Monthly Quarterly Semiannually Annually Daily or miscellaneous (each day of the payroll period) One Withholding Allowance $ 73.08 146.15 158.33 316.67 950.00 1,900.00 3,800.00 14.62 TABLE 1—WEEKLY Payroll Period (a) SINGLE person (including head of household) (b) MARRIED person, If the amount of wages (after If the amount of wages (after subtracting withholding The amount of income tax subtracting withholding allowances) is: to withhold is: allowances) is: Not over $41 $0 Not over $156 Over But not over- of excess over Over But not over- $41 - $209 $0.00 plus 10% -$41 $156 -$490 $209 -$721 $16.80 plus 15% -$209 $490 -$1,515 $721 - $1,688 $93.60 plus 25% -$721 $1,515 -$2,900 $1,688 -$3,477 $335.35 plus 28% -$1,688 $2,900 -$4,338 $3,477 - $7,510 $836.27 plus 33% -$3,477 $4,338 -$7,624 $7,510 $2,167.16 plus 35% -$7,510 $7,624 The amount of income tax to withhold is: $0 of excess over- $0.00 plus 10% -$156 $33.40 plus 15% -$490 $187.15 plus 25% - $1,515 $533.40 plus 28% - $2,900 $936.04 plus 33% -$4,338 $2,020.42 plus 35% -$7,624

Answer 1

1
Deduction for Social Security taxes	74.40	=1200*6.2%
2
Deduction for Medicare taxes	17.40	=1200*1.45%
3
Gross pay	1200.00
Less: Withholding allowance	584.60	=146.15*4
Taxable pay	615.40
Deduction for FIT (Federal Income Tax)	61.54	=615.40*10%
4
Gross pay	1200.00
Less: Deductions
Social Security taxes	74.40
Medicare taxes	17.40
Federal Income Tax	61.54
Total Deductions	153.34
Net pay	1046.66