Question

Larren Buffett is concerned after receiving her weekly paycheck. She believes that her deductions for Social Security, Medicare, and Federal Income Tax withholding (FIT) may be incorrect. Larren is paid a salary of $3,900 weekly. She is married, claims 3 deductions, and prior to this payroll check, has total earnings of $116,600. What are the correct deductions for Social Security, Medicare, and FIT? Assume a rate of 6.2% on $118,500 for Social Security and 1.45% for Medicare. (Use Table 9.1 and Table 9.2). (Round your answers to the nearest cent.) Deductions

Social Security $

Medicare $

FIT $

Answer 1

	Social security		(118500-116600)*6.2%			117.8
	Medicare		3900*1.45%			56.55
	FIT:
	Assumed that tax year is 2018.
	Used Percentage method
	Wages				3900
	Less: Allowance
	One allownce (As per table)			79.8
	Allownce claimed			3	239.4
	Amount subject to withholding				3660.6
	Tax to be withheld (As per table)
	[541.84+(3660.6-3390)*24%]				606.78
	FIT=$ 606.78