Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 9, Problem 16MCQ
To determine
Concept Introduction:
The FUTA taxes: The Federal
To explain: the FUTA tax
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Students have asked these similar questions
Federal income taxes are subject to a maximum amount per employee per year.TrueFalse
The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are
applied to the first $7,000 of an employee's pay. Assume that an employee earned
total wages of $9,900. What is the amount of total unemployment taxes the
employer must pay on this employee's wages?
For each of the listed payroll-related taxes, indicate whether they generally apply to employees only, employers only, or both. Explain your answers.
1. Federal income tax
2. Medicare tax
3. Social security tax
4. Federal unemployment compensation tax
5. State unemployment compensation tax
Chapter 9 Solutions
Income Tax Fundamentals 2020
Ch. 9 - Prob. 1MCQCh. 9 - Abbe, age 56, is married and has two dependent...Ch. 9 - Prob. 3MCQCh. 9 - Prob. 4MCQCh. 9 - Prob. 5MCQCh. 9 - Estimated payments for individual taxpayers are...Ch. 9 - Prob. 7MCQCh. 9 - Prob. 8MCQCh. 9 - Prob. 9MCQCh. 9 - Prob. 10MCQ
Ch. 9 - Ran's wage income is $47,350 in 2019. The combined...Ch. 9 - Prob. 12MCQCh. 9 - Prob. 13MCQCh. 9 - Prob. 14MCQCh. 9 - Prob. 15MCQCh. 9 - Prob. 16MCQCh. 9 - Prob. 17MCQCh. 9 - Prob. 18MCQCh. 9 - Prob. 19MCQCh. 9 - Prob. 20MCQCh. 9 - Prob. 21MCQCh. 9 - Bonnie is getting close to retirement and realizes...Ch. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Kana is a single wage earner with no dependents...Ch. 9 - Lamden Company paid its employee, Trudy, wages of...Ch. 9 - Fiduciary Investments paid its employee, Yolanda,...Ch. 9 - Thuy worked as the assistant manager at Burger...Ch. 9 - Prob. 11PCh. 9 - Prob. 13PCh. 9 - Prob. 14PCh. 9 - Allen (age 32) takes a distribution of $20,000...
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- The employer is responsible for which of the following payroll taxes? a. 6.2% FICA—OASDI tax b. 1.45% FICA—Medicare tax c. Federal and state unemployment taxes d. All of the abovearrow_forwardThe current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $2,900 in the current period and had cumulative pay for prior periods of $5,800. What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period?arrow_forwardEach year, there is a maximum for the amount of earnings subject to all of the following taxes except O a federal income tax O b. social security tax Oc. state unemployment tax Od federal unemployment taxarrow_forward
- The current Federal Unemployment Taxes (FUTA) tax rate is 0.6%, and the State Unemployment Taxes (SUTA) tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $3,060 in the current period and had cumulative pay for prior periods of $6,120. What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period? Multiple Choice $420.00. $367.20. $52.80. O $183.60. $0.00.arrow_forwardSuppose that the income tax law exempts income of less than $8000 from the tax, taxes income between $8000 and $20,000 at a 25% rate, and taxes income greater than $20,000 at a 30% rate. Find the average tax rate and the marginal tax rate for someone earning $16,000 and for someone earning $30,000. The tax law is change so that income of less than $6000 is untaxed, income from $6000 to $20,000 is taxed at 20%,arrow_forwardBased on the information in problem 2, calculate and record the employers payroll taxes for the period in the general journal below. The state employment tax rate is 5.4 percent, and the federal unemployment tax rate is 0.8 percent.arrow_forward
- For each of the following payroll-related taxes, indicate whether they generally apply to (a) employees only, (b) employers only, or (c) both employees and employers:1. Federal income tax2. Medicare tax3. Social security tax4. Federal unemployment compensation tax5. State unemployment compensation taxarrow_forwardWhich of the following is true? A. The total tax due arising from each quarterly income tax return is only applicable to the taxable income for that quarter. B. The taxable compensation income of mixed-income earners are reported in each quarterly return. C. When an eligible taxpayer chooses the 8% optional tax, the P250,000 is deducted from the gross sales/receipts from business and other non-operating income in arriving at the tax base for the 8% rate. D. When a taxpayer who originally opted to be taxed at 8% breaches the VAT threshold at the middle of the year, he shall be liable to the graduated tax from the time it breaches the threshold. E. None of the other choices is true.arrow_forwarda) Tax BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $137,700 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. FUTA SUTA b) Tax b. c. 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). Note: Round your answers to 2 decimal places. FICA-Social Security FICA-Medicare FUTA SUTA c) Tax Gross Pay through August 31 $ 6,500 2,100 131,500 FICA-Social Security FICA-Medicare FUTA SUTA FICA-Social Security FICA-Medicare Gross Pay for September $ 900 2,200 8,100 September Earnings Subject to Tax September Earnings Subject to Tax September Earnings Subject to Tax Tax Rate Tax Rate Tax Rate Tax Amount Tax Amount Tax Amountarrow_forward
- Each year, there is a maximum for the amount of earnings subject to all of the following taxes except a.state unemployment tax b.federal unemployment tax c.social security tax d.federal income taxarrow_forwardEach year there is a ceiling for the amount that is subject to all of the following except a.federal income tax b.federal unemployment tax c.social security tax d.state unemployment taxarrow_forwardUse 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 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: Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate). If the third decimal place is 5 or more, round to the next higher cent. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. Dee is paid $2,345 on November 8, 20--. Dee had cumulative gross earnings, including…arrow_forward
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