Ebony earned $86,760 during 2016.She is single,paid semimonthly,and claims one withholding allowance.How much will Ebony's employer withhold from her,in total for each pay period for FICA and federal withholding taxes? Round your answer to 2 decimal places.)

Question

Quizplus · Accepted Answer

To calculate the total withholding for each pay period for FICA and federal withholding taxes, we need to first calculate Ebony's gross pay and then calculate the withholding amounts based on that.

Ebony's gross pay for the year is $86,760, which means her semimonthly pay is $3,614 ($86,760/24).

For FICA taxes, the Social Security tax rate is 6.2% and the Medicare tax rate is 1.45%. Therefore, the total FICA tax rate is 7.65%.

Ebony's semimonthly gross pay of $3,614 means her FICA tax withholding will be:

$3,614 x 7.65% = $276.37

For federal withholding taxes, we need to use the IRS tax tables to calculate the amount. Based on the information provided (single, one withholding allowance), we can assume that Ebony will use the "Single" section of the tax tables.

Using the IRS tax tables for biweekly pay periods (which are close to semimonthly pay periods) and assuming Ebony receives two pay periods each month, we can estimate her federal withholding to be:

$445 for the first $3,557 of taxable income
plus 25% of the amount over $3,557

Using this formula, we can estimate Ebony's federal withholding each pay period as follows:

$445 + (25% x ($3,614 - $3,557)) = $938.40

Therefore, Ebony's employer will withhold a total of $1,214.77 ($276.37 + $938.40) from her each semimonthly pay period for FICA and federal withholding taxes. Rounded to two decimal places, this is choice B, $938.40.

Ebony Earned $86,760 During 2016