Problem Information

Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI:	6.20%	$132,900	$8,239.80
Employee* and Employer HI:	1.45%	No limit	No maximum
Self-employed OASDI:	12.4%	$132,900	$16,479.60
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:

1. 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).
2. If the third decimal place is 5 or more, round to the next higher cent.
3. 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.

On August 1, Huff (part-time waitress) reported on Form 4070 the cash tips of $158.50 that she received in July. During August, Huff was paid wages of $550 by her employer. Determine the following: Round your answers to the nearest cent.

	OASDI	HI
a. The amount of social security taxes that the employer should withhold from Huff's wages during August:	$fill in the blank 1	$fill in the blank 2
b. The amount of the employer's social security taxes on Huff's wages and tips during August:	$fill in the blank 3	$fill in the blank 4