1) BMX Company has one employee. FICA Social Security taxes are 6.2% of the firs

Question

1) BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $117,000 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 2.9% of the first $7000 paid to its employee. 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). (Round amounts to cents.) Gross Pay through August a. $ 6,400 b. 18,200 c. 110,700 Gross Pay for September a. $800 b. 2,100 c. 8,000

Explanation / Answer

Answer a. Tax Sep. Earnings Subject to tax Tax Rate Tax Amt. FICA - Social Security                    800.00 6.20%               49.60 FICA - Medicare Tax                    800.00 1.45%               11.60 FUTA                    600.00 0.60%                 3.60 SUTA                    600.00 2.90%               17.40 Answer b. Tax Sep. Earnings Subject to tax Tax Rate Tax Amt. FICA - Social Security                2,100.00 6.20%            130.20 FICA - Medicare Tax                2,100.00 1.45%               30.45 FUTA                             -   0.60%                      -   SUTA                             -   2.90%                      -   Answer c. Tax Sep. Earnings Subject to tax Tax Rate Tax Amt. FICA - Social Security                6,300.00 6.20%            390.60 FICA - Medicare Tax                8,000.00 1.45%            116.00 FUTA                             -   0.60%                      -   SUTA                             -   2.90%                      -

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