Discuss and identify the amounts for the wage limits, surtax and floors for 2019 for the...
Discuss and identify the amounts for the wage limits, surtax and floors for 2019 for the following taxes to be withheld from employees.
a. Social security
b. Medicare
Homework Answers
As part of your overall payroll taxes the federal government requires employer to collect the FICA(Federal Insurance Corporation Act) tax. The tax includes two separate taxes social Security tax and medicare tax.
Medicare tax -
- Medicare tax rate is 2.9%. Employer and employee split that cost with each paying 1.45%.
- The Affordable Care Act added an extra Medicare tax for high earner. This surtax is known as additional Medicare tax Anyone with earned income of more than $200000 ($250000 for married couples filing jointly) has to pay an additional 0.9%in Medicare taxes beyond the standard 1.45% .
- There is no wage base limits for Medicare tax all covered wages are subject to Medicare tax
Social Security tax -
- The current tax rate for social Security is 6.2% for employer and 6.2% for employees or 12.4% total.
- Social Security wage base will be $ 132900
- So an individual with wages upto or above the maximum in 2019 would pay $8239.80in tax and the employer pay an equal amount
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Discuss and identify the amounts for the wage limits, surtax and
floors for 2019 for the...
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Wage and Tax Statement Data on Employer FICA Tax Ehrlich Co. began business on January 2. Salaries were paid to e...
Wage and Tax Statement Data on Employer FICA Tax Ehrlich Co. began business on January 2. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal Income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the...
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Use the following table to answer the question: Wages and salaries expense (gross pay) $2,250,000 Amounts withheld from employees' pay: $170,000 Income taxes Social Security and Medicare $150,000 320,000 Payroll taxes expense: Social Security and Medicare $150,000 Unemployment taxes 58,000 208,000 Workers' compensation premiums 130,000 Group health insurance premiums (paid by employer) 252,000 Contributions to employees pension plan (paid by employer and fully funded) 140,000 Cost of other postretirement benefits $90,000 Unfunded 120,000 210,000 Rose Company's total payroll-related expense for...
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