Amazon Appliance Company has three installers. Larry earns $355 per week, Curly earns $460 per week, and Moe earns $585 per week. The company's SUTA rate is 5.4%, and the FUTA rate is 6.2% minus the SUTA. As usual, these taxes are paid on the first $7,000 of each employee's earnings.
a. How much SUTA and FUTA tax does Amazon owe for the first quarter of the year?
SUTA: $
FUTA: $
b. How much SUTA and FUTA tax does Amazon owe for the second quarter of the year?
SUTA: $
FUTA: $
To calculate the SUTA and FUTA taxes owed by Amazon Appliance Company for each quarter, we need to follow these steps:
Step 1: Find the total earnings for each quarter
To find the total earnings for each quarter, we need to sum up the earnings of all three installers.
Quarter 1 earnings:
Larry's earnings: $355 * 13 weeks = $4,615
Curly's earnings: $460 * 13 weeks = $5,980
Moe's earnings: $585 * 13 weeks = $7,605
Total earnings for Quarter 1 = $4,615 + $5,980 + $7,605 = $18,200
Quarter 2 earnings:
Larry's earnings: $355 * 13 weeks = $4,615
Curly's earnings: $460 * 13 weeks = $5,980
Moe's earnings: $585 * 13 weeks = $7,605
Total earnings for Quarter 2 = $4,615 + $5,980 + $7,605 = $18,200
Step 2: Calculate SUTA tax for each quarter
SUTA tax rate is 5.4%, and it applies to the first $7,000 of each employee's earnings.
SUTA tax for Quarter 1 = $7,000 (limit) * 5.4% = $378
SUTA tax for Quarter 2 = $7,000 (limit) * 5.4% = $378
Step 3: Calculate FUTA tax for each quarter
FUTA tax rate is 6.2% minus the SUTA rate.
FUTA tax rate = 6.2% - 5.4% = 0.8%
FUTA tax for Quarter 1 = $7,000 (limit) * 0.8% = $56
FUTA tax for Quarter 2 = $7,000 (limit) * 0.8% = $56
Therefore, the answers to the given questions are as follows:
a. How much SUTA and FUTA tax does Amazon owe for the first quarter of the year?
SUTA: $378
FUTA: $56
b. How much SUTA and FUTA tax does Amazon owe for the second quarter of the year?
SUTA: $378
FUTA: $56