396 Chapter 9 Taxes
- Tris has a part-time job, where his hours and hence his income vary from one biweekly pay period to the next. He is
single, and claims one exemption on his W-4. His company does not offer him any benefi ts, and so he has no deductions
for them. What would his federal tax withholding be for a pay period in which his gross pay was:
a. $205.92
b. $525.25
c. $846.15D. Annual Tax Filings
- In 2006 Alan and Cathy earn a combined income of $75,372. Their taxable income was $50,037. Alan had $4,265.09
withheld from his paychecks for federal income taxes, and Cathy had $2,777.33 withheld.
a. How much did they have withheld for federal taxes in total?
b. How much do they actually owe in federal income taxes for the year?
c. Will they have to pay extra when they fi le their taxes, or will they get a refund? How much will they owe or how
much will their refund be?- Suppose that Lita’s (from Exercise 14) husband earned $31,035 last year. He also fi led his W-4 based on married status
with four exemptions.
a. Calculate the federal tax withholding from each of his biweekly paychecks.
b. Calculate the total tax withhold for the year for both Lita and her husband.
c. When they complete their tax return, they fi nd that their total federal income taxes for the year are $3,109.62. Will
they receive a refund or owe extra taxes? How much?- Suppose that Surima’s (from Exercise 15) husband earned $52,045 last year and had $5,892.37 withheld from his paycheck
for federal income taxes. When they fi le their taxes, they fi nd that their total federal income taxes for the year are $27,500.
a. If Surima fi led her W-4 form for married withholding, how much will they owe or receive as a refund?
b. If Surima fi led her W-4 form for single withholding, how much will they owe or receive as a refund.- Suppose that Brian has a part-time job at a golf-course and his hours vary a lot over the course of the year. In the
summer he works lots of hours, but in the winter months he usually only puts in a few hours each week. When he fi les
his annual income tax return, would you expect that Brian would owe money or get a refund? Why?
E. FICA and Self-Employment Tax
- How much total FICA taxes will I pay for the year if I earn a $39,456 gross salary with no deductions for benefi ts?
- Calculate the total employee share of FICA taxes for the year for someone who earns $8,035 gross income. Assume no
deductions for benefi ts. - How much total Social Security tax will you pay for the year if you earn $125,769 in gross salary? How much total
Medicare tax will you pay for the year? Assume no deductions for benefi ts.