Phil Phoenix is paid monthly. For the month of January of the current year, he earned a total of $8,288. The FICA tax rate for social security is 6.2% and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the total amount of taxes withheld from the Phoenix's earnings? (Round your intermediate calculations and final answer to two decimal places.)
q. $3,097.17
b. $2,009.21
c. $1,495.36
d. $2,443.21
e. $1,722.00
B.) $2,009.21
To calculate the total amount of taxes withheld from Phil Phoenix's earnings, we need to calculate the amounts of FICA tax for social security and Medicare, FUTA tax, and SUTA tax. Finally, we add these amounts to the federal income tax withheld.
Step 1: Calculate FICA tax for social security:
FICA tax for social security = (FICA tax rate for social security) * (Total earnings for the month)
= 6.2% * $8,288
= $514.496 (rounded to two decimal places)
Step 2: Calculate FICA tax for Medicare:
FICA tax for Medicare = (FICA tax rate for Medicare) * (Total earnings for the month)
= 1.45% * $8,288
= $120.056 (rounded to two decimal places)
Step 3: Calculate FUTA tax:
FUTA tax = (FUTA tax rate) * (Maximum taxable amount)
= 0.8% * $7,000
= $56 (rounded to two decimal places)
Step 4: Calculate SUTA tax:
SUTA tax = (SUTA tax rate) * (Maximum taxable amount)
= 5.4% * $7,000
= $378 (rounded to two decimal places)
Step 5: Calculate total taxes withheld:
Total taxes withheld = Amount of Federal Income Tax withheld + FICA tax for social security + FICA tax for Medicare + FUTA tax + SUTA tax
= $1,375.17 + $514.496 + $120.056 + $56 + $378
= $2,443.212 (rounded to two decimal places)
Therefore, the total amount of taxes withheld from Phil Phoenix's earnings is approximately $2,443.21.
The correct answer is option d: $2,443.21.
To calculate the total amount of taxes withheld from Phil Phoenix's earnings, we need to consider the FICA tax, the FUTA tax, the SUTA tax, and the Federal Income Tax.
1. Calculate the FICA tax for Social Security:
Social Security tax = Total earnings * Social Security tax rate
Social Security tax = $8,288 * 6.2% = $514.656
2. Calculate the FICA tax for Medicare:
Medicare tax = Total earnings * Medicare tax rate
Medicare tax = $8,288 * 1.45% = $120.016
3. Calculate the FUTA tax:
FUTA tax = Total earnings * FUTA tax rate
FUTA tax = $8,288 * 0.8% = $66.304
4. Calculate the SUTA tax:
SUTA tax = Total earnings * SUTA tax rate
SUTA tax = $7,000 * 5.4% = $378
5. Calculate the total taxes withheld:
Total taxes withheld = Social Security tax + Medicare tax + FUTA tax + SUTA tax + Federal Income Tax
Total taxes withheld = $514.656 + $120.016 + $66.304 + $378 + $1,375.17
Total taxes withheld = $2,454.13
Rounded to two decimal places, the total amount of taxes withheld from Phil Phoenix's earnings is $2,454.13.
So, the correct answer is d. $2,443.21