Answer Sheet-Crunch the Numbers Chapter 10

In this chapter, we learned that FICA mandates that employers deduct taxes from employees pay each pay period to fund the OASDI and Medicare programs. Calculate the tax amounts for the following individuals:

Ana - Annual Salary paid monthly $250,000 - Employer: Self

Roberto - Annual Salary paid monthly $90,000 -Employer: Johnsons Materials

Maria - Annual Salary paid monthly $120,000 - Employer: Johnson Materials

Jim - Annual Salary paid monthly $50,000 - Employer: Self

Rate for self OASDI is 12.4%

Rate for employees is 6.2%

Rate for self medicare 2.9%

Rate for employees 1.45%

Using the table above, from page 261 of your text, answer the following questions:

10-12. How much does the employer pay in total for OASDI each monthly pay period for

(a) Ana,

(b) Roberto,

(c) Maria, and

(d) Jim?

(Remember that for self-employment, the individual and the employer are one and the same.)

10-13. If the taxable wage base were to increase to $135,000, how much do the employer and employee pay in total for OASDI each monthly pay period for

(a) Ana,

(b) Roberto,

(c) Maria, and

(d) Jim?