FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Instruction 3-1
Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI: 6.20% $137,700 $8,537.40
Employee* and Employer HI: 1.45% No limit No maximum
Self-employed OASDI: 12.4% $137,700 $17,074.80.60
Self-employed HI: 2.9% No limit No maximum
*Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed.
Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows:
1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimals places (round the hourly rate to 2 decimal places
before multiplying by one and one-half to determine the overtime rate).
2. If the third decimal place is 5 or more, round to the next higher cent.
3. If the third decimal place is less than 5, drop the third decimal place.
Refer to Instruction 3-1. Crow earned $585.15 during the week ended March 1, 20--. Prior to payday, Crow had cumulative gross earnings of $4,733.20.
| a) | The amount of OASDI taxes to withhold from Crow's pay is __________. |
| b) | The amount of HI taxes to withhold from Crow's pay is __________. |
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