Problem 6-20 (Algorithmic)Computing the 0.9 Percent Medicare Tax for High-Income Taxpayers (LO 6.8)Married taxpayers Otto and Ruth are both self-employed and file a joint return. Otto earns $380,600 of self-employment incomeand Ruth has a self-employment loss of $28,700.How much 0.9 percent Medicare tax for high-income taxpayers will Otto and Ruth have to pay with their 2021 income tax return?If required, round your final answer to nearest dollar.

Threshold for Additional Medicare Tax for Married tax payers filing joitly for 2021=$250,000

Answered: Problem 6-20 (Algorithmic) Computing…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter3: Computing The Tax

Section: Chapter Questions

Problem 25P

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LO2 Joyce Lee earns 30,000 a year. Her employer pays a matching Social Security tax of 6.2% on the first 118,500 in earnings, a Medicare tax of 1.45% on gross earnings, and a FUTA tax of 0.6% and a SUTA tax of 5.4%, both on the first 7,000 in earnings. What is the total cost of Joyce Lee to her employer? (a) 32,295 (b) 30,000 (c) 30,420 (d) 32,715
PERSONAL TAXES Joe and Jane Keller are a married couple who file a joint income tax return, where the tax rates are based on the tax tables presented in the chapter. Assume that their taxable income this year was 165,000. a. What is their federal tax liability? b. What is their marginal tax rate? c. What is their average tax rate?
Use Figure 12.15 to complete the following problem. Roland Inc. employees monthly gross pay information and their W-4 Form withholding allowances follow. Rolands payroll deductions include FICA Social Security at 6.2%, FICA Medicare at 1.45%, FUTA at 0.6%, SUTA at 5.4%, federal income tax (based on withholdings table) of gross pay, state income tax at 3% of gross pay, and health insurance coverage premiums of $1,000 split 50% employees and 50% employer. Assume each employee files as single, gross income is the same amount each month, October is the first month of business operation for the company, and salaries have yet to be paid. Record the entry or entries for accumulated employee and employer payroll for the month of October; dated October 31.
ESTIMATING TAXABLE INCOME, TAX LIABILITY, AND POTENTIAL REFUND. Hannah Owens is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned 55,000 as a sales assistant for Business Solutions: 3,910 of her wages was withheld for federal income taxes. In addition, she had interest income of 142. She takes the standard deduction. Calculate her taxable income, tax liability, and tax refund or tax owed for 2015.
Use Figure 12.15 as a reference to answer the following questions. A. If an employee makes $1,400 per month and files as single with no withholding allowances, what would be his monthly income tax withholding? B. What would it be if an employee makes $2,500 per month and files as single with two withholding allowances?
An employee earns $8,000 in the first pay period. The FICA Social Security Tax rate is 6.2%, and the FICA Medicare tax rate is 1.45%. What is the employees FICA taxes responsibility? A. $535.50 B. $612 C. None, only the employer pays FICA taxes D. $597.50 E. $550
LO.2, 5 Rosas employer has instituted a flexible benefits program. Rosa will use the plan to pay for her daughters dental expenses and other medical expenses that are not covered by health insurance. Rosa is in the 24% marginal tax bracket and estimates that the medical and dental expenses not covered by health insurance will be within the range of 4,000 to 5,000. Her employers plan permits her to set aside as much as 5,000 in the flexible benefits account. Rosa does not itemize her deductions. a. Rosa puts 4,000 into her flexible benefits account, and her actual expenses are 5,000. What is her cost of underestimating the expenses? b. Rosa puts 5,000 into her flexible benefits account, and her actual expenses are only 4,000. What is her cost of overestimating her expenses? c. What is Rosas cost of underfunding as compared with the cost of overfunding the flexible benefits account? d. Does your answer in part (c) suggest that Rosa should fund the account closer to the low end or to the high end of her estimates?

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