Wage and Tax Statement Data on Employer Federal Insurance Contributions Act tax
ID: 2596511 • Letter: W
Question
Wage and Tax Statement Data on Employer Federal Insurance Contributions Act tax used to finance federal programs for old-age and disability benefits (social security) and health insurance for the aged (Medicare).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 The total amount paid to employees for a certain period.payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in the following year, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the A detailed record of each employee's earnings.employees' earnings records were inadvertently destroyed.
None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5% on salary. Data on dates of employment, salary rates, and employees’ income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:
Required:
1. Compute the amounts to be reported for the year on each employee’s Wage and Tax Statement (Form W-2). Enter amounts to the nearest cent if required. Enter all amounts as positive numbers.
2. Compute the following employer payroll taxes for the year: (A) social security, (B) Medicare, (C) state unemployment compensation at 5.4% on the first $10,000 of each employee’s earnings, (D) federal unemployment compensation at 0.8% on the first $10,000 of each employee’s earnings, (E) total. Round your answers to two decimal places.
Employee Date First Employed Monthly Salary Monthly Income Tax Withheld Arnett Nov. 16 $5,500 $944 Cruz Jan. 2 4,800 833 Edwards Oct. 1 8,000 1,592 Harvin Dec. 1 6,000 1,070 Nicks Feb. 1 10,000 2,350 Shiancoe Mar. 1 11,600 2,600 Ward Nov. 16 5,220 876Explanation / Answer
1 Employee Gross earnings Federal income tax withheld Social security tax withheld Medicare tax withheld 1 2 (1)*6% (2)*1.5% Arnett 66000 11328 3960 990 (5500*12) (944*12) Cruz 57600 9996 3456 864 (4800*12) (833*12) Edwards 96000 19104 5760 1440 (8000*12) (1592*12) Harvin 72000 12840 4320 1080 (6000*12) (1070*12) Nicks 120000 28200 7200 1800 (10000*12) (2350*12) Shiancoe 139200 31200 8352 2088 (11600*12) (2600*12) Ward 62640 10512 3758.4 939.6 (5220*12) (876*12) Total 613440 123180 36806.4 9201.6 2 (a) Social security 36806.4 (b) Medicare 9201.6 (c) State unemployment compensation (Note:1) 3780 (d) Federal unemployment compensation (Note:1) 560 (e) Total 50348 Notes:1 Employee Gross earnings State unemployment compensation Federal unemployment compensation (10000*5.4%) (10000*0.8%) Arnett 66000 540 80 Cruz 57600 540 80 Edwards 96000 540 80 Harvin 72000 540 80 Nicks 120000 540 80 Shiancoe 139200 540 80 Ward 62640 540 80 Total 613440 3780 560
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