Cotter Company wants to award a $4,000 bonus to Donna D'Amico. In addition, it wants the...

 
 

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Cotter Company wants to award a $4,000 bonus to Donna D'Amico. In addition, it wants the net Assuming D'Amico is still under the OASDI/FICA limit, the calculation would be: A. $4,000 1 0.22 (supplemental W/H rate) - 0.062 (OASDI) - 0.0145 (HI) $4,000 B. = $5,685.86 grossed-up bonus 0.7035 C. Gross bonus amount $5,685.85* Federal Income Tax withheld 1,250.89 OASDI tax withheld HI tax withheld Take-home bonus check 352.52 82.44 $4,000.00 If state or local taxes apply, they must also be included in the formula. *Need to subtract $0.01 from $5,685.86 in order to arrive at $4,000.00 (due to rounding). Mattola Company is giving each of its employees a holiday bonus of $725 on December 13, 20-- (a nonpayday). The company wants each employee's check to be $725. The supplemental tax percent is used. Nobody has capped for OASDI prior to the bonus check. As we go to press, the federal income tax rates for 2022 are being determined by budget talks in Washington and not available for publication. For this edition, the 2021 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2021 FICA rates I have been used. a. What will be the gross amount of each bonus if each employee pays a state income tax of 2.8% (besides the other payroll taxes)? You may need to add one penny to the gross so that net bonus exactly equals $725. Round your calculations and final answers to the nearest cent. b. What would the net amount of each bonus check be if the company did not gross-up the bonus? Round your intermediary calculations to the nearest cent. Cotter Company wants to award a $4,000 bonus to Donna D'Amico. In addition, it wants the net Assuming D'Amico is still under the OASDI/FICA limit, the calculation would be: A. $4,000 1 0.22 (supplemental W/H rate) - 0.062 (OASDI) - 0.0145 (HI) $4,000 B. = $5,685.86 grossed-up bonus 0.7035 C. Gross bonus amount $5,685.85* Federal Income Tax withheld 1,250.89 OASDI tax withheld HI tax withheld Take-home bonus check 352.52 82.44 $4,000.00 If state or local taxes apply, they must also be included in the formula. *Need to subtract $0.01 from $5,685.86 in order to arrive at $4,000.00 (due to rounding). Mattola Company is giving each of its employees a holiday bonus of $725 on December 13, 20-- (a nonpayday). The company wants each employee's check to be $725. The supplemental tax percent is used. Nobody has capped for OASDI prior to the bonus check. As we go to press, the federal income tax rates for 2022 are being determined by budget talks in Washington and not available for publication. For this edition, the 2021 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2021 FICA rates I have been used. a. What will be the gross amount of each bonus if each employee pays a state income tax of 2.8% (besides the other payroll taxes)? You may need to add one penny to the gross so that net bonus exactly equals $725. Round your calculations and final answers to the nearest cent. b. What would the net amount of each bonus check be if the company did not gross-up the bonus? Round your intermediary calculations to the nearest cent.