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On August 1, Huff (part-time waitress) reported on Form 4070 the cash tips of $158.50 that she received in July. During August, Huff was paid wages of $550 by her employer. Determine the following: Round your answers to the nearest cent.

On August 1, Huff (part-time waitress) reported on Form 4070 the cash tips of $158.50 that she received in July. During August, Huff was paid wages of $550 by her employer. Determine the following: Round your answers to the nearest cent.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Use the following tax rates, ceiling and maximum taxes: Employee and Employer OASDI: $142,800 Employee* and Employer HI: 6.20% 1.45% 12.4% Self-employed OASDI: No limit $142,800 No limit Self-employed HI: 2.9% *Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. On August 1, Huff (part-time waitress) reported on Form 4070 the cash tips of $158.50 that she received in July. During August, Huff was paid wages of $550 by her employer. Determine the following: Round your answers to the nearest cent. OASDI HI a. The amount of social security taxes that the employer should withhold from Huff's wages during August: b. The amount of the employer's social security taxes on Huff's wages and tips during August: $8,853.60 No maximum $17,707.20 No maximum X X
Transcribed Image Text:Use the following tax rates, ceiling and maximum taxes: Employee and Employer OASDI: $142,800 Employee* and Employer HI: 6.20% 1.45% 12.4% Self-employed OASDI: No limit $142,800 No limit Self-employed HI: 2.9% *Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. On August 1, Huff (part-time waitress) reported on Form 4070 the cash tips of $158.50 that she received in July. During August, Huff was paid wages of $550 by her employer. Determine the following: Round your answers to the nearest cent. OASDI HI a. The amount of social security taxes that the employer should withhold from Huff's wages during August: b. The amount of the employer's social security taxes on Huff's wages and tips during August: $8,853.60 No maximum $17,707.20 No maximum X X
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