Question

Ben Carver is CEO of a large company. Ben's most recent paycheck showed his biweekly gross pay as $4.200. His prior year-to-date earnings are $125,600. He is married and claims 3 withholding allowances.

What amount of Social Security will be withheld from Ben's paycheck?

What amount of Medicare will be withheld from Ben's paycheck?

What amount of Federal Income Tax would be withheld from Ben's paycheck?  

Answer 1

All amounts are in $

Tax year is taken as 2020 (since nothing is given in question)

Also given the taxpayer is married but not given as filing jointly, so taken as arrived filing separately

Maximum income for Social Security is $137,700

Social Security withheld = 6.2% x 4,200 = 260.4

Medicare withheld = 1.45% x 4,200 = 60.9

Federal income tax withholding : This depends whether "box in Step 2 in Form W-4" is cheked or not checked

If box is Unchecked

= 561.68 + 24% x (4,200-3,766)

= 665.84

If box in Checked

= 639.94 + 32% x (4,200-3,379)

= 902.66

Note : Percentage method of withholding is used as the income exceeded the maximum limit of $100,000 for wage bracket method