Question

# BMX Company has one employee. FICA Social Security taxes are 6.2% of the first \$118,500 paid...

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first \$118,500 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 2.9% of the first \$7,000 paid to its employee.

 Gross Pay through August Gross Pay for September a. \$ 5,500 \$ 2,300 b. 19,200 3,100 c. 113,200 9,000

Compute BMX’s amounts for each of these four taxes as applied to the employee’s gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.)

 a) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 2300 6.20% 142.60 FICA-Medicare 2300 1.45% 33.35 FUTA 1500 0.60% 9.00 SUTA 1500 2.90% 43.50 b) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 3100 6.20% 192.20 FICA-Medicare 3100 1.45% 44.95 FUTA 0 0.60% 0.00 SUTA 0 2.90% 0.00 c) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 5300 6.20% 328.60 FICA-Medicare 9000 1.45% 130.50 FUTA 0 0.60% 0.00 SUTA 0 2.90% 0.00 Note: Earnings taxable for FUTA and SUTA in (a) = 7000-5500 = 1500 Note: Earnings taxable for Social Security in c = 118500-113200 = \$5300

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