Portia Grant is an employee who is paid monthly. For the month of January of the
ID: 2391093 • Letter: P
Question
Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee’s pay. The amount of federal income tax withheld from her earnings was $1,325.17. What is the total amount of taxes withheld from the Portia’s earnings? (Round your intermediate calculations to two decimal places.)
A- $3,097.17
B- $2,443.21
C- $1,957.06
D- $1,722.00
E- $1,495.36
Explanation / Answer
The Answer is “C- $1,957.06”
Total amount of taxes withheld from the Portia’s earnings = $1957.06
Total amount of taxes withheld = Federal Income Tax + FICA tax for social security + FICA tax rate for Medicare
= $1,325.17 + [ $8,260 x 6.20%] + [$8,260 x 0.60%]
= $1,325.17 + 512.12 + 119.77
= $1,957.06