2.1 deductions notes
- 1. 2.1 Deductions September 13, 2011 Objective: calculate total deductions and net pay 35% $25,078.20 33% no, higher tax rate HW pg. 45 #735 odds, 3644 1
- 2. 2.1 Deductions September 13, 2011 HW pg. 45 #735 odds, 3644 2
- 3. 2.1 Deductions September 13, 2011 2.1 Federal Withholding Tax Deduction Deductions: subtractions from gross pay Withholding taxes: income taxes deduction Withholding allowance: reduces amount withheld http://www.irs.gov/app/understandingTaxes/student/hows_mod01.jsp Payroll and income taxes are withheld from employees' pay by their employers. Employers send withheld taxes to the federal government. Payroll taxes include Social Security ﴾FICA﴿ tax rate is 6.2% and Medicare tax rate is 1.45%. Employees complete Form W4 which tells the employer how much income tax to withhold. HW pg. 45 #735 odds, 3644 3
- 4. 2.1 Deductions September 13, 2011 To figure Missouri State Income Tax, use the following chart: The tax table below will show in detail the Missouri state income tax rates by income tax bracket(s). There are 10 income tax brackets for Missouri. If your income range is between $0 and $1,000, your tax rate on every dollar of income earned is 1.5%. If your income range is between $1,001 and $2,000, your tax rate on every dollar of income earned is 2%. If your income range is between $2,001 and $3,000, your tax rate on every dollar of income earned is 2.5%. If your income range is between $3,001 and $4,000, your tax rate on every dollar of income earned is 3%. If your income range is between $4,001 and $5,000, your tax rate on every dollar of income earned is 3.5%. If your income range is between $5,001 and $6,000, your tax rate on every dollar of income earned is 4%. If your income range is between $6,001 and $7,000, your tax rate on every dollar of income earned is 4.5%. If your income range is between $7,001 and $8,000, your tax rate on every dollar of income earned is 5%. If your income range is between $8,001 and $9,000, your tax rate on every dollar of income earned is 5.5%. If your income range is $9,001 and over, your tax rate on every dollar of income earned is 6% HW pg. 45 #735 odds, 3644 4
- 5. 2.1 Deductions September 13, 2011 A single receptionist's weekly wages are $380 with 1 withholding allowance. What federal income tax is withheld? (look at the chart!) What state income tax is withheld? (multiply by the rate) HW pg. 45 #735 odds, 3644 5
- 6. 2.1 Deductions September 13, 2011 Federal Insurance Contributions Act (FICA) benefits include disability, medicare, retirement and survivors Multiply Find the Social Security, Medicare, and total FICA tax for the following incomes. $35,000 $80,000 HW pg. 45 #735 odds, 3644 6
- 7. 2.1 Deductions September 13, 2011 Find the medicare, social security, federal, and state taxes withheld. Then find the net pay. You earn $843 this week at your job. HW pg. 45 #735 odds, 3644 7
- 8. 2.1 Deductions September 13, 2011 HW pg 45 # 7 35 odds (use missouri state income tax for other), 36 44 HW pg. 45 #735 odds, 3644 8