Question

# [The following information applies to the questions displayed below.] BMX Company has one employee. FICA Social...

[The following information applies to the questions displayed below.]

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first \$128,400 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first \$7,000 paid to its employee.

 Gross Pay through August 31 Gross Pay for September a. \$ 6,500 \$ 900 b. 2,050 2,150 c. 122,200 8,100
 a) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA—Social Security 6.20% FICA—Medicare 1.45% FUTA 0.60% SUTA 5.40% b) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA—Social Security FICA—Medicare FUTA SUTA c) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA—Social Security FICA—Medicare FUTA SUTA

#### Homework Answers

Answer #1
 a) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 900 6.20% 55.80 FICA-Medicare 900 1.45% 13.05 FUTA 500 0.60% 3.00 SUTA 500 5.40% 27.00 b) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 2150 6.20% 133.30 FICA-Medicare 2150 1.45% 31.18 FUTA 2150 0.60% 12.90 SUTA 2150 5.40% 116.10 c) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 6200 6.20% 384.40 FICA-Medicare 8100 1.45% 117.45 FUTA 0 0.60% 0.00 SUTA 0 5.40% 0.00 Note: Earnings taxable for FUTA and SUTA in (a) = 7000-6500 = \$500 Note: Earnings taxable for Social Security in (c) = 128400-122200 = \$6200
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