Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 15, Problem 3AP
To determine
Calculate Corporation M’s cost of the salary in each of the assumptions given.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The Diamond Corporation has two employees, Emily and Mary. Assume Diamond does not defer payroll tax payments or claim employee retention credits or sick and family leave credits.
a.
If Emily earns wages of $26,000 for 2020, calculate the total amount of the FICA tax that must be paid:
by Emily
by Diamond Corporation
Total
b.
If Mary earns wages of $164,000 for 2020, calculate the total amount of the FICA tax that must be paid:
by Mary
by Diamond Corporation
Total
K is the president and chief executive officer of KL, Inc., an S corporation that is owned equally byindividuals K and L. K receives a salary of $83,000, and her share of the net income, after deductingexecutive salaries, is $50,000. What is the proper income tax and payroll tax (F.I.C.A. or self‐employmenttax) treatment of each of the following to K for the current calendar year?a. The salaryb. The net income of $50,000.c. Calculate the payroll tax for K
Lynette is the CEO of publicly traded TTT Corporation and earns a salary of $272,500 in the current year.
What is TTT Corporation’s after-tax cost of paying Lynette’s salary excluding FICA taxes?
Chapter 15 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 15 - Prob. 1QPDCh. 15 - Prob. 2QPDCh. 15 - Prob. 3QPDCh. 15 - Discuss the practical reasons why the tax law...Ch. 15 - Prob. 5QPDCh. 15 - Mr. Burnett owns 10 percent of the stock of ABC...Ch. 15 - This year, publicly held Corporation DF paid its...Ch. 15 - Mr. Zelig was recently promoted to an executive...Ch. 15 - Prob. 9QPDCh. 15 - Prob. 10QPD
Ch. 15 - Prob. 11QPDCh. 15 - Prob. 12QPDCh. 15 - Prob. 13QPDCh. 15 - Prob. 14QPDCh. 15 - Greg Company agreed to pay Ms. Bilko 45,000...Ch. 15 - Trent Inc. needs an additional worker on a...Ch. 15 - Prob. 3APCh. 15 - Mr. and Mrs. Brock own a bakery. Their marginal...Ch. 15 - Mr. and Mrs. Soon are the sole shareholders of SW...Ch. 15 - Prob. 6APCh. 15 - Mrs. Flay, age 57, participates in the group term...Ch. 15 - Mrs. Ellers corporate employer has a cafeteria...Ch. 15 - Mr. Nixon and Mr. Ryan are employed by HD Inc.,...Ch. 15 - Peet Company provides free on-site day care for...Ch. 15 - This year, Faro Inc., a calendar year taxpayer,...Ch. 15 - Prob. 12APCh. 15 - Prob. 13APCh. 15 - Prob. 14APCh. 15 - Refer to the facts in the preceding problem. Five...Ch. 15 - Prob. 16APCh. 15 - Prob. 17APCh. 15 - Prob. 18APCh. 15 - Prob. 19APCh. 15 - Prob. 20APCh. 15 - Prob. 21APCh. 15 - Prob. 22APCh. 15 - Prob. 23APCh. 15 - Prob. 24APCh. 15 - Prob. 25APCh. 15 - Prob. 26APCh. 15 - Prob. 27APCh. 15 - Refer to the facts in the preceding problem Assume...Ch. 15 - Prob. 29APCh. 15 - Prob. 30APCh. 15 - What is the maximum IRA contribution that Mr....Ch. 15 - Prob. 32APCh. 15 - Ms. Ray is age 46 and single. Her employer made a...Ch. 15 - Mr. and Mrs. Davos file a joint tax return. Each...Ch. 15 - Mr. and Mrs. Mario, ages 39 and 35, file a joint...Ch. 15 - Prob. 36APCh. 15 - Prob. 37APCh. 15 - Prob. 38APCh. 15 - Prob. 39APCh. 15 - Prob. 40APCh. 15 - Prob. 41APCh. 15 - Prob. 1IRPCh. 15 - Prob. 2IRPCh. 15 - Prob. 3IRPCh. 15 - Prob. 4IRPCh. 15 - Prob. 5IRPCh. 15 - Prob. 6IRPCh. 15 - Prob. 7IRPCh. 15 - Prob. 8IRPCh. 15 - Prob. 9IRPCh. 15 - Prob. 10IRPCh. 15 - Prob. 11IRPCh. 15 - Prob. 12IRPCh. 15 - Prob. 13IRPCh. 15 - Prob. 14IRPCh. 15 - Prob. 15IRPCh. 15 - Prob. 1RPCh. 15 - Prob. 2RPCh. 15 - Prob. 3RPCh. 15 - Prob. 4RPCh. 15 - This year, Mr. Joss accepted a job with BL Inc. He...Ch. 15 - Mr. Remling is entitled to a 5,200 bonus this year...Ch. 15 - Prob. 3TPCCh. 15 - Prob. 4TPC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Darrell is an employee of Whitneys. During the current year, Darrells salary is 136,000. Whitneys net self-employment income is also 136,000. Calculate the Social Security and self-employment taxes paid by Darrell and Whitney. Write a letter to Whitney in which you state how much she will have to pay in Social Security and self-employment taxes and why she owes those amounts.arrow_forwardDuring the year, employee Sean Matthews earned wages in the amount of 250,000. Discuss how the employees HI tax will differ from the employers HI tax for this employee.arrow_forwardFor each of the following individuals, calculate the applicable self-employment tax. Assume that each individual files tax returns under single status. Remember, the IRS instructs employers to collect additional Medicare tax on all employee earnings more than $200,000 in a single year without regard to filing status. NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation. 1: Allison Wilson earns net self-employment income of $74,200. She does not work a second job. Self-Employment tax = $ 2: Martin Hughes earns net self-employment income of $157,100. He works a second job from which he receives FICA taxable earnings of $110,200. Self-Employment tax = $ 3: Elisa Grant earns net self-employment income of $198,000. She works a second job from which she receives FICA taxable earnings of $83,000. Self-Employment tax = $arrow_forward
- Lynette is the CEO of a publicly traded company TT company and earns a salary of $380,000 in the current year. What is TTT Corporation's after-tax cost of paying Lynette's salary excluding FICA taxes?arrow_forwardMorgan is paid $2,947.75 per week. What is the amount of federal income tax withheld from Morgan's paycheck under the following conditions? Assume that Morgan has only one job or that step 2 of Form W- 4 is not checked. Also, her employer uses the Percentage Method Tables for Automated Systems. Use percentage method tables for automated systems. Required: a. Morgan is single, with no dependents. b. Morgan is married (spouse does not work) and claims two dependents who are under the age of 17. c. Morgan is single, claims no dependents, but wants $60 in additional withholding. Note: For all requirements, round your intermediate computations and final answers to 2 decimal places. a. Federal income tax withholdings b. Federal income tax withholdings c. Federal income tax withholdings Amountarrow_forwardEkiya, who is single, has been offered a position as a city landscape consultant. The position pays $ 133,400 in wages. Assume Ekiya has no dependents. Ekiya deducts the standard deduction instead of itemized deduction a. What is the amount of Ekiya's after-tax compensation (ignore payroll taxes)? Description Amount (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Taxable income (6) Income tax liability After-tax compensationarrow_forward
- Allison is paid $2,850 per week. What is the amount of federal income tax withheld from Allison's paycheck under the following conditions? Assume that Allison has only one job or that step 2 of Form W-4 is not checked. Also, her employer uses the Percentage Method Tables for Automated Systems. Use percentage method tables for automated systems. Required: a. Allison is single and no dependents. b. Allison is married (her spouse does not work) and claims two dependents who are under the age of 17. c. Allison is single, claims no dependents, but wants $60 in additional withholding. (For all requirements, round your intermediate computations and final answers to 2 decimal places.) a. Federal income tax withholdings b. Federal income tax withholdings c. Federal income tax withholdings Amountarrow_forwardMorgan is paid $2,915.75 per week. What is the amount of federal income tax withheld from Morgan's paycheck under the following conditions? Assume that Morgan has only one job or that step 2 of Form W-4 is not checked. Also, her employer uses the Percentage Method Tables for Automated Systems. Use percentage method tables for automated systems. Required: a. Morgan is single, with no dependents. b. Morgan is married (spouse does not work) and claims two dependents who are under the age of 17. c. Morgan is single, claims no dependents, but wants $50 in additional withholding. Note: For all requirements, round your intermediate computations and final answers to 2 decimal places. a. Federal income tax withholdings b. Federal income tax withholdings c. Federal income tax withholdings Amountarrow_forwardSparrow Corporation would like you to review its employee fringe benefits program with regard to the tax consequences of the plan for the company's president (Polly), who is also the majority shareholder. For the following items, indicate what amount, if any, is included in Polly's gross income. If an amount is zero, enter "0". a. The company has a qualified retirement plan. The company pays the cost of employees attending a retirement planning seminar. The employee must be within 10 years of retirement, and the cost of the seminar is $1,500 per attendee. $fill in the blank 1 b. The company owns a parking garage that is used by customers, employees, and the general public, but primarily by the employees. Only the general public is required to pay for parking. The charge to the general public for Polly's parking for the year would have been $3,600 (a $300 monthly rate). $fill in the blank 2 c. All employees are allowed to use the company's fixed charge long-distance telephone…arrow_forward
- Ekiya, who is single, has been offered a position as a city landscape consultant. The position pays $125,000 in wages. Assume Ekiya has no dependents. Ekiya deducts the standard deduction instead of itemized deductions, and she is not eligible for the qualified business income deduction. (Use the tax rate schedules.) a. What is the amount of Ekiya's after-tax compensation (ignore payroll taxes)? Description (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Taxable income (6) Income tax liability After-tax compensation Amount $ 125,000 $ 125,000 $ 125,000arrow_forwardJC recently graduated from veterinary school and opened their own professional practice. This year, their net profit was $22,300. Assume JC does not qualify for the QBI deduction. Required: a. Compute JC's after-tax income from their practice assuming their self-employment tax is $3,151, and their marginal income tax rate is 22 percent. b. What percentage of the federal tax burden on JC's business income is represented by the self-employment tax? Complete this question by entering your answers in the tabs below. Required A Required B What percentage of the federal tax burden on JC's business income is represented by the self-employment tax? Note: Round your answer to the nearest whole percent. Self-employment tax %arrow_forwardMike Barton owns Barton Products, In. The corporation has 30 employees. Barton Corporation expects $800,000 of net income before taxes in 2021. Mike is married and files a joint return with his wife, Elaine, who has no carnings of her own. Mike and Elaine have no other income, file a joint tax return, and claim the standard deduction. Mike's salary is $200,000 per year (already deducted in computing Barton Corporation's $800,000 net income).A. Identify and write down the given facts. Then, calculate the tax liability for Barton Corporation and for Mike and Elaine. B. Should Mike increase his salary from Barton by $50,000 to reduce the overall tax burden to himself and Barton Products? Because of the Social Security cap, the corporation and Mike each would incur a 1,45% payroll tax with the corporate portion being deductible.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT