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    10 views17 pages

    Homework PDF

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    samwel

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    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 17
    In this exercise, we will be working through an entire payroll cycle for the month of December for Griffin Industries, located in Omaha, Nebraska. Griffin has seven employees, all paid an hourly rate or a standard salary. Below is the payroll information for each of the employees. Griffin pays their employees semi-monthly on the 15" and the last day of the month. They are monthly filers with both Federal and Nebraska agencies. Employee Position Salary Marital [Exemptions | 401(K) Hours 1-15 | Hours 16- Election Dec 31 Dec Griffin, Peter President/CEO $420,000 M 5 3% Griffin, Lois Sr. Vice President | $217,500 M 0 8% Griffin, Chris VP, Operations $187,500 M 4 A% | Quagmire, Glen | VP, Finance $135,000 |M 2 4% Brown, Production Mgr. | $37.75/hour | M 6 5% Cleveland Swanson, Joe | Production Asst. | $23.95/hour |S 0 3% Goldman, Mort | Accountant $28.00/hour | S 3 4% ‘Name: Griffin, Lois : eo * . . te: $217,500 annual . Status: Married Exemptions: 0 Totals to Date | December 15® | Totals to Date | December 31st ‘Annual Total | ss Pay this Period $199,375.00 401(k) election — 8% $15,950.00 Medical Insurance $2,200.00 $100.00 $100.00. Federal Taxable Wages $181,225.00 Calculation of Federal Withholding Lower limit of tax bracket Excess over lower limit Marginal tax rate | Marginal tax $36,500.20 | State Taxable Wages $181,225.00 Calculation of State Withholding | Nebraska Withholding $11,053.68 Calculation of FICA $127,200.00 $7,886.40 Calculation of Medicare Wages subject to Medicare | $197,175.00 Medicare tax withheld $2,859.12 Calculation of the Additional Medicare Tax (AMT) Wages subject to AMT $0.00 ‘Additional Medicare tax $0.00 Net Pay $122,925.60 i ——S Employee Name: Grifin, Chris Salary Rate: $187,500 annual Marital Status: Married Exemptions: 4 December 31st Totals to Date Gross Pay this Period | $6,875.00[ Medical Insurance $2,200.00 $100.00 Federal Taxable Wages $147,950.00 Calculation of Federal Withholding [Lower limit of tax bracket Excess over lower limit Marginal tax rate Marginal tax $100.00 Additional tax Federal Withholding $27,193.10 State Exemption Amount State Taxable Wages $155,61 Calculation of State Withholding Lower limit of tax bracket Excess over lower limit Marginal tax rate Marginal tax Additional tax Nebraska Withholding $9,273.66 Calculation of FICA 7) Wages subject to FICA $127,200.00 FICA tax withheld $7,886.40 Calculation of Medicare Wages subject to Medicare | $169,675.00 Medicare tax withheld $2,460.26 Calculation of the Additional Medicare Tax (AMT) Wages subject to AMT $0.00 Additional Medicare tax $0.00 Net Pay $115,986.58 yyee Name: Quagmire, Status: Married Rate: $135,000 annual Glen Exemptions: 2 Totals to Date | December 15 | Totals to Date December 31st | Annual Total Pay this Period $123,750.00 401(K) election = 4% $4,950.00 Medical Insurance $2,200.00 $100.00 $100.00 Federal Taxable Wages $109,175.00 Calculation of Federal Withholding Lower limit of tax bracket Excess over lower limit I tax rate “Marginal tax ‘Additional tax ‘Federal Withholding $17,499.46 State Taxable Wages $113,006.74 | Excess over lower limit | Marginal tax rate Marginal tax | Additional tax Calculation of State Withholding Nebraska Withholding $6,312.46 Calculation of FICA Wages subject to FICA $121,550.00 FICA tax withheld $7,536.10 Calculation of Medicare Wages subject to Medicare | $121,550.00 Medicare tax withheld $1,762.42 Calculation of the Additional Medicare Tax (AMT) Wages subject to AMT $0.00 ‘Additional Medicare tax $0.00 Net Pay $83,489.56 = nployee Name: Brown, Cleveland lary Rate: $37.75 per hour arital Status: Married Exemptions: 6 Regular Hours Overtime Hours Totals to Date | December 15" Totals to Date | December 31st Annual Te Gross Pay this Period $77,778.21 Exemption Amount 401(K) election — 5% $3,888.89 Medical Insurance $2,200.00 $100.00 $100.00 ‘ederal Taxable Wages $49,414.32 culation of Federal Withholding ‘Lower limit of tax bracket Excess over lower limi Marginal tax rate Marginal tax Federal Withholding $5,368.36 ate Exemption Amount State Taxable Wages $60,909.32 | Lower limit of tax bracket Excess over lower limit Marginal tax rate Calculation of State Withholding Marginal tax | Additional tax Nebraska Withholding $2,702.43 Calculation of FICA ‘Wages subject to FICA $75,578.21 FICA tax withheld $4,685.85 Calculation of Medicare Wages subject to Medicare | __ $75,578.21 Medicare tax withheld $1095.89 Calculation of the Additional Medicare Tax (AMT) Wages subject to AMT $0.00 ‘Additional Medicare tax $0.00 ‘Net Pay $57,836.79 ;ployee Name: Swanson, Joe lary Rate: $23.95 per hour rrital Status: Single Exemptions: 0 Regular Hours ‘Overtime Hours Exemption Amount Totals to Date $48,938.23 December 15" Totals to Date December 31st Annual Total 401(K) election — 3% $1,468.15 Medical Insurance $2,200.00 $100.00 $100.00 | Federal Taxable Wages $45,270.08 | Lower limit of tax bracket Excess over lower limit Marginal tax rate | Marginal tax Calculation of Federal Withholding Additional tax | Federal Withholding $6,884.51 State Exemption Amount State Taxable Wages $45,270.08 Lower limit of tax bracket Calculation of State Withholding Excess over lower limit Marginal tax rate Marginal tax ‘Additional tax Nebraska Withholding $2,176.18 | Calculation of FICA ‘Wages subject to FICA $46,738.23 FICA tax withheld $2,897.75 Calculation of Medicare ‘Wages subject to Medicare | $46,738.23 Medicare tax withheld $677.72 Calculation of the Additional Medicare Tax (AMT) ‘Wages subject to AMT 30.00 ‘Additional Medicare tax 30.00 Net Pay $32,633.92 Employee Name: Goldman, Mort Salary Rate: $28.00 per hour : Exemptions: 3 Marital Status: Single Totals to Date | December 75 [Totals to Date | December 31st ‘otal | Decembe Regular Hours Overtime Hours ee Gross Pay this Period $56,637.00 Exemption Amount 401(K) election — 4% $2,265.49 Medical Insurance $2,200.00 $100.00 $100.00 Federal Taxable Wages $41,034.01 Calculation of Federal Withholding Lower limit of tax bracket Excess over lower limit Marginal tax rate Marginal tax ‘Additional tax Federal Withholding $5,878.51 ‘State Exemption Amount State Taxable Wages $46,781.51 Calculation of State Withholding Lower limit of tax bracket Excess over lower limit Marginal tax ‘Additional tax Nebraska Withholding $2,275.77 Calculation of FICA Wages subject to FICA $54,437.00 FICA tax withheld $3,375.09 Calculation of Medicare Wages subject to Medicare | $54,437.00 Medicare tax withheld $789.34 Calculation of the Additional Medicare Tax (AMT) Wages subject to AMT $0.00 ‘Additional Medicare tax $0.00 ‘Net Pay $39,852.80 | q lotice 1036 December 2016) Department of the Treasury Internal Revenue Service Early Release Copies of the 2017 Percentage Method Tables for Income Tax Withholding Future Developments For the latest information about developments related to Notice 1036, such as legislation enacted after it was. published, go to www.irs.gov/notice 1096. Percentage Method Tables for Income Tax Withholding ‘Attached are early release copies of the Percentage Method Tables for Income Tax Withholding that will appear in Pub. 15, Employer's Tax Guide (For use in 2017). Pub. 15 will be posted on IRS.gov in December 2016. ‘The wage amounts shown in the Percentage Method Tables for Income Tax Withholding are net wages after, the deduction for total withholding allowances. The withholding allowance amounts by payroll period have changed. For 2017, they are: One Withholding ‘Allowance $ 790 Biweekly 155.80 ‘Semimonthly 168.60 Monthy 337.50 Quarterly 401250 ‘Semiannually 2,025.00 Annually 4,050.00 Daly or Miscellaneous: 15.60 (each day ofthe payroll period) When employers use the Percentage Method Tables for Income Tax Withholding, the tax for the pay period may be rounded to the nearest dollar. If rounding is used, it must be used consistently. Withheld tax amounts should be rounded to the nearest dollar by dropping amounts under 50 cents and increasing amounts from 50 to 99 cents to the next higher dollar. For example, $2.30 becomes $2 and $2.50 becomes $3. Withholding Adjustment for Nonresident Aliens For 2017, apply the procedure discussed below to figure the amount of income tax to withhold from the wages of nonresident alien employees performing services within the United States. Note. Nonresident alien students from India and business apprentices from India aren't subject to this procedure. Instructions. To figure how much income tax to withhold from the wages paid to a nonresident alien ‘employee performing services in the United States, use the following steps. Step 1. Add to the wages paid to the nonresident alien employee for the payroll period the amount shown in the chart below for the applicable payroll period. ‘Amount to Add to Nonresident Alien Employee's ‘Wages for Calculating Income Tax Withholding Only Weekly 3 44.20 Biwockty 2850 Semimonihiy 95.00 Monthly 191.70 vary 575.00 Semiannvally 4,150.00 Annwaly 2200.00 Daly or Miscelanoous 880 (each day of the payroll period) Step 2. Use the amount figured in Step 1 and the number of withholding allowances claimed (generally limited to one allowance) to figure income t withholding. Determine the value of withholding allowances by multiplying the number of withholding allowances claimed by the appropriate amount in the table shown earlier. Reduce the amount figured in Step by the value of withholding allowances and use that reduced amount to determine the wages subject to income tax withholding. Figure the income tax withholding using the Percentage Method Tables for Income Tax Withholding provided on pages 3 and 4. Aematvaly, you can Sgur the ingore tax using the Wage Bracket Method Tables for| Withholding included in Pub. 15 Forse m 2000), Reg Re cea IRS.gov Catalog No. 219748 ——E———t—~—~—~— Social Security and Medicare Tax for 2017 For social security, the tax rate is 6.2% each for the Employee and employer, unchanged from 2016. The Social security wage base limit is $127,200. The Modicare tax rate is 1.45% each for the employee and employer, unchanged from 2076. There is no wage base limit for Medicare tax. In addition to withholding Medicare tax at 1.45%, you must withhold a 0.9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in la calendar year. You're required to begin withholding ‘Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and Continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax. All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. For more information on what wages are subject to Medicare tax, see the chart, Special Rules for, Various Types of Services and Payments, in section 15 of Pub. 15. For more information on Additional Medicare Tax, visit IRS. gov and enter “Additional Medicare Tax” in the search box. Withholding on Supplemental Wages See section 7 of Pub. 15 for the definition of supplemental wages. Withholding on supplemental wages when an employee receives $1 million or less of supplemental wages during the calendar year. If the supplemental wages paid to the employee during the calendar year are less than or equal to $1 million, the following rules apply in determining the amount of income tax to be withheld. ‘Supplemental wages combined with regular wages. If you pay supplemental wages with regular ‘wages but don't specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period. ‘Supplemental wages identified separately from regular wages. I you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages. 1. Ifyou withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one OF the following for the supplemental wages- ‘a. Withhold a flat 25% (NO allowed) . id concurrently »._fthe supplemental wages are PANS SIE ng with regular wages, add the SUPP! as vir urently paid regular wages. [there are concurrently paid regular wages, add the SUPP tiages to alternatively, ether the regular wader peed Wag paid forthe current payroll period or the regula) wages paid for the preceding payroll period. Flaite eee re tax withholding as ifthe total of the regular wages and supplemental wages isa single payment ‘Subtract the tax withheld from the regular wages. Withhold the remaining tax from the supplemental Wages. I there were olher payments of supplemental wages paid during the payroll period made before the Current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and the previous supplemental wage payments, and withhold the remaining tax. 2. Ifyou didn't withhold income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b. This would ‘occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages. other percentage Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages during the calendar year. Ifa supplemental wage payment, together with other supplemental wage payments made to the employee during the calendar year, exceeds $1 million, the excess. is subject to withholding at 39.6% (or the highest rate of income tax for the year). Withhold using the 39.6% rate without regard to the employee's Form W-4. Regardless of the method you use to withhold income tax on supplemental wages, they are subject to social security, Medicare, and FUTA taxes. Examples of withholding on supplemental wage payments are included in section 7 of Pub. 15. Backup Withholding Rate You generally must withhold 28% of certain taxable payments if the payee fails to furnish you with his or her correct taxpayer identification number (TIN). This withholding is referred to as “backup withholding,” For more information on backup withholding, including the types of payments subject to backup withholding, see Nonpayroll Income ee 1yroll Tax Withholding in gral a Percentage Method Tables for Income Tax Withholding (For Wages Paid in 2017) (9) SINGLE person (inclu ifthe amount of wages (alter subtracting TABLE 1— WEEKLY Payroll Period \(b) MARRIED person— 1 the amount of wages (after subtracting ing head of household) — The amount of income tax “The amount of income tax (ater

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