BMX Company has one employee. FICA Social Security taxes are 6.20%

BMX Company has one employee. FICA Social Security taxes are 6.20% 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 0.60% and SUTA taxes are 2.90% of the first $7,000 paid to its employee.

 

	Gross Pay through August					Gross Pay for September
a.		$	5,200				$	3,100
b.			15,600					2,600
c.			102,000					20,800

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 your answers to 2 decimal places.)

Explanation:

		Subject to Tax		Rate		Tax		Explanation
(a)	FICA—Social Security	$	3,100	6.20	%	$	192.20	Full amount is subject to tax.
	FICA—Medicare		3,100	1.45	%		44.95	Full amount is subject to tax.
	FUTA		1,800	0.60	%		10.80	$1,300 is over the maximum.
	SUTA		1,800	2.90	%		52.20	$1,300 is over the maximum.
(b)	FICA—Social Security	$	2,600	6.20	%	$	161.20	Full amount is subject to tax.
	FICA—Medicare		2,600	1.45	%		37.70	Full amount is subject to tax.
	FUTA		0	0.60	%		0.00	Full amount is over maximum.
	SUTA		0	2.90	%		0.00	Full amount is over maximum.
(c)	FICA—Social Security	$	15,000	6.20	%	$	930.00	$5,800 is over the maximum.
	FICA—Medicare		20,800	1.45	%		301.60	Full amount is subject to tax.
	FUTA		0	0.60	%		0.00	Full amount is over maximum.
	SUTA		0	2.90	%		0.00	Full amount is over maximum.