c. (3 points) Amount of the net FUTA tx h Shelly s wags 5. The company of Florid

Question

c. (3 points) Amount of the net FUTA tx h Shelly s wags 5. The company of Florida Enterprises paid the following wages during the year: M. Rutherford (owner). T. Johnson (supervisor) $63,000 47,530 A. Olson (maintenance worker) S. Carlstrom (accountant)6,000 8,000 In addition, the company owed Johnson $300 for work performed but not yet paid to him. Payment for this work will be paid in January of next year. The state unemployment tax rate for the company is 4.9% on the first $11,000 of each employee's earnings. Compute: a) (5 points) What is the amount of taxable wages for FUTA for the year? b) (2 points) Net FUTA tax for the company for the year c) (5 points) What is the amount of taxable wages for SUTA for the year? d) (2 points) SUTA tax for the year

Explanation / Answer

Total unemployment tax (SUTA + FUTA) rate is 6.2%; since SUTA is 4.9%, the remaining (6.2% - 4.9% =) 1.3% must be FUTA.

a.

There is a limit of $11,000 on each individual’s yearly earnings.

Taxable wages = M + T + M + A + S

                        = 11,000 + 11,000 + 11,000 + 8,000 + 6,000

                        = $47,000 (Answer)

b.

FUTA tax = Taxable wages × FUTA rate

                  = $47,000 × 1.3%

                  = $611 (Answer)

c.

There is a same limit of $11,000 on each individual’s yearly earnings for SUTA.

Taxable wages = M + T + M + A + S

                        = 11,000 + 11,000 + 11,000 + 8,000 + 6,000

                        = $47,000 (Answer)

b.

SUTA tax = Taxable wages × SUTA rate

                  = $47,000 × 4.9%

                  = $2,303 (Answer)

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