Solutions Guide: This is meant as a solutions guide.

Please try reworking the questions and reword the answers

(especially essay type parts) so as to guarantee that your answer is an original. Do not submit as your own.

Use the percentage method to compute the federal income taxes to withhold from the wages or salaries of each employee.
42A.
Employe Employee
e
Name

Mari
tal

No.

Status
1
2
3
4
5

Amoroso, A.
Finley, R.
Gluck, E.
Quinn, S.
Treave, Y.

M
S
S
M
M

No. of

Gross Wage

Amount

Withholding

or Salary

to Be

Allowances
4
0
5
8
3

Withheld
$1,610
825
9,630
925
2,875

weekly
biweekly
quarterly
semimonthly
monthly

Eaton Enterprises uses the wage-bracket method to determine federal income tax withholding on its employees. Find the
amount to withhold from the wages paid each employee.
44A.

Marital

Payroll Period

No. of

W = Weekly

Withholding

S = Semimonthly

Amount to

Employee

Status

Allowances

M = Monthly

Wage

Be Withheld

D = Daily
Hal Bower
Ruth Cramden
Gil Jones
Teresa Kern
Ruby Long
Katie Luis
Susan Martin
*Jim Singer
Martin Torres

M
S
S
M
M
M
S
S
M

1
1
3
6
2
8
1
4
4

W
W
W
M
M
S
D
S
M

$1,350
590
675
4,090
2,730
955
96
2,610
3,215

*Must use percentage method (Jim Singer ONLY)

Damerly Company wants to give a holiday bonus check of $250 to each employee. Since it wants the check amount to be $250,
it will need to gross up the amount of the bonus. Calculate the withholding taxes and gross amount of the bonus to be made to
John Rolen if his cumulative earnings for the year are $46,910. Besides, being subject to social security taxes and federal
income tax (supplemental rate), a 7% California income tax must be withheld on supplemental payments.
46A.
(a)

$250

1 0.25 (supplemental federal rate) 0.062 (OASDI) 0.0145 (HI) 0.07 (California tax) = ___________

(b) $250/(1 0.3965) = __________

(c) Gross bonus amount __________

Federal income tax withheld __________
OASDI tax withheld ____________
HI tax withheld ____________
California income tax withheld ___________
Take-home bonus check __________

George Clausen (age 48) is employed by Kline Company and is paid a salary of $42,640. He has just decided to join the
companys Simple Retirement Account (IRA form) and has a few questions. Answer the following:
411A.
(a) Clausens maximum contribution _____________
(b) Kline Companys contribution (3%) _____________

(c) Clausens take-home pay with the

retirement contribution deducted:
Weekly pay.............................................................

$ 820.00

FICAOASDI..............................................................

______

FICAHI.....................................................................

______

FIT ($820.00 $230.77 = $589.23 taxable)...............

_________*

State income tax ($820.00 0.023)...........................

______

Retirement contribution ($12,000 52)............ ....

Take-home pay.......................................................

_______
_______

*Married, 2 allowances.
(d) Clausens take-home pay without the
retirement contribution deducted:
Weekly pay...........................................................

$820.00

FICAOASDI..........................................................

______

FICAHI.................................................................

______

FIT (on $820.00)......................................................

______

State income tax ($820.00 0.023)........................

______

Take-home pay.......................................................

______

Solutions
4-2A)
Employee
No.

1
2
3
4
5
a
b
c
d
e

Employee
Name

No. of
Marital Withholding
Status Allowances

Amoroso, A.
Finley, R.
Gluck, E.
Quinn, S.
Treave, Y.

M
S
S
M
M

4
0
5
8
3

Gross Wage
or Salary

$1,610 weekly
825 biweekly
9,630 quarterly
925 semimonthly
2,875 monthly

Amount
to Be
Withheld

$157.55a
94.60b
542.55c
0.00d
125.00e

$1,610.00 4($73.08) = $1,317.68 $490.00 = $827.68 0.15 = $124.15 + $33.40 = $157.55

$825.00 $0 = $825.00 $417.00 = $408.00 0.15 = $61.20 + $33.40 = $94.60
$9,630.00 5($950.00) = $4,880.00 $2,713.00 = $2,167.00 0.15 = $325.05 + $217.50 = $542.55
$925.00 8($158.33) = $0
$2,875.00 3($316.67) = $1,924.99 $675.00 = $1,249.99 0.10 = $125.00

4-4A)

Marital

No. of
Withholding

Payroll Period
W = Weekly
S = Semimonthly
M = Monthly

Amount to

Employee
Hal Bower
Ruth Cramden
Gil Jones
Teresa Kern
Ruby Long
Katie Luis
Susan Martin
Jim Singer
Martin Torres

Status
M
S
S
M
M
M
S
S
M

Allowances
1
1
3
6
2
8
1
4
4

D = Daily
W
W
W
M
M
S
D
S
M

Wage
$1,350
590
675
4,090
2,730
955
96
2,610
3,215

Be Withheld
$152.00
64.00
54.00
156.00
143.00
0.00
10.00
306.27**
128.00

**$2,610.00 4($158.33) = $1,976.68 $1,563.00 = $413.68 0.25 = $103.42 + $202.85 = $306.27

4-6A)
(a)

$250
1 0.25 (supplemental federal rate) 0.042 (OASDI) 0.0145 (HI) 0.07 (California tax)

(b) $250/(1 0.3765) = $250/0.6235 = $400.96

(c) Gross bonus amount
Federal income tax withheld
OASDI tax withheld
HI tax withheld
California income tax withheld
Take-home bonus check

4-11A)

$ 400.96
(100.24)
(16.84)
(5.81)
(28.07)
$ 250.00

(a) Clausens maximum contribution

$11,500.00

(b) Kline Companys contribution (3%)

$1,279.20

(c) Clausens take-home pay with the

retirement contribution deducted:
Weekly pay .....................................................................................
FICAOASDI ...............................................................................
FICAHI .......................................................................................
FIT ($820.00 $221.15 = $598.85 taxable) ...................................
State income tax ($820.00 0.023) ................................................
Retirement contribution ($11,500 52) .........................................
Take-home pay................................................................................

$ 820.00
(34.44)
(11.89)
(29.00)*
(18.86)
(221.15)
$ 504.66

*Married, 2 allowances.
(d) Clausens take-home pay without the
retirement contribution deducted:
Weekly pay .....................................................................................
FICAOASDI ...............................................................................
FICAHI .......................................................................................
FIT (on $820.00) .............................................................................
State income tax ($820.00 0.023) ................................................
Take-home pay................................................................................

$820.00
(34.44)
(11.89)
(62.00)
(18.86)
$692.81