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% and the FICA tax rate for Medicare is 1.45%. 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?

Question

Quizplus · Accepted Answer

Portia's gross pay for the month is $8,260.

First, we need to calculate the FICA taxes:

- Social security tax = $8,260 x 6.2% = $511.72
- Medicare tax = $8,260 x 1.45% = $119.77

The total FICA taxes withheld from Portia's earnings are $511.72 + $119.77 = $631.49.

Next, we need to calculate the FUTA and SUTA taxes:

- FUTA tax = $7,000 x 0.6% = $42.00
- SUTA tax = $7,000 x 5.4% = $378.00

The total FUTA and SUTA taxes withheld from Portia's earnings are $42.00 + $378.00 = $420.00.

Finally, we subtract the federal income tax withheld from Portia's gross pay:

- Federal income tax withheld = $1,325.17

To calculate the total amount of taxes withheld, we add up all of the taxes withheld from Portia's earnings:

$631.49 (FICA) + $420.00 (FUTA/SUTA) + $1,325.17 (federal income tax) = $2,376.66

Therefore, the total amount of taxes withheld from Portia's earnings is $2,376.66, which is closest to choice C: $1,957.06.

Portia Grant Is an Employee Who Is Paid Monthly