Study F Take Practice Federal Income Tax Withholding Bob Ave

Study F Take: Practice! Federal Income Tax Withholding Bob Avery\'s weekly gross earnings for the present week were $2,590. Avery has four exemptions. Using the wage bracket withhoiding table in Exhibit 2 with a $75 standard withholding allowance for each exemption, what is Avery\'s federal income tax withholding? Round your answer to two decimal places.

Solution

1. $584.44

Gross Earnings = $2,590

Withholding exemptions( 4 x $75) = $300

Taxable earnings = $2,290

Federal Income Tax = $584.44

( $344.20 + 28% of ($2,590-$1,732) = $344.20+$240.24)

2. Answer is (a).

Social security tax and medicare tax are withoeld from the employee for $1,050 and the employer\'s also contributes equal amount. therefore the credit to Social Security and Medicare Tax Payable will be $2,100.

(b) $500 will be credit to retirement savings account.

(c) $2,800 will be credit to Federal Income Tax Payable Acount.

(d)  is wrong. The debit to payroll tax expense will be $1,050 plus FUTA and SUTA.

3. Answer is (d).

Working:

4. Answer is (a).

  

Social Security Tax	1200
Medicare Tax	300
FUTA (0.8% of $7,000)	56
SUTA (5.4% of $7,000)	378
Total Payroll Tax Expenses	1934