Module 04 Written Exercise
For this exercise, go to https://www.eftps.gov to search for "Electronic Federal Tax Payments" and go to https://www.ssa.gov/pubs/10022.html to search for "self-employment income". Discuss the following questions:
1. How long does it take a taxpayer to enroll in the Electronic Federal Tax Payment System (EFTPS)?
2. What are the advantages of the EFTPS?
3. How is self-employment income treated differently than income earned when you work for an employer?
4. How do you report self-employment income?
Module 04 Payroll Problems
Problem 4.1
An employee earns $900 per week. Compute the employee portion of the FICA taxes. Assume that the OASDI rate is 5.9% and the HI rate is 1.5%. Determine the following taxes:
Employee OASDI
Employee HI
Problem 4.2
An employee earns $3,500 a month. Compute the employee portion of the FICA taxes. Assume that the OASDI rate is 7% and the HI rate is .45%. Determine the following taxes:
Employee OASDI
Employee HI
Problem 4.3
An employee earns $1,100 a month. Compute the employee and employer portion of the FICA taxes. Assume that the OASDI rate is 5.95% and the HI rate is 1 .25%. Determine the following taxes:
Employee OASDI
Employee HI
Employer OASDI
Employee HI
Problem 4.4
An employee earns $1,800 per week and has earned 112,800 year to date. Compute the employee and employer portions of the FICA taxes. Assume that the OASDI rate is 6.35% and the HI rate is 1.15%. Also assume that the taxable wage limit for OASDI is the first $113,500 of wages earned for the year.
Determine the following taxes:
Employee OASDI
Employee HI
Employer OASDI
Employee HI
Problem 4.5
An employee earns 4,200 a month and has earned 111,700 year to date. Compute the employee and employer portions of the FICA taxes. Assume that the OASDI rate is 6.25% and the HI rate is 1.25%. Also assume that the taxable wage limit for OASDI is the first $112,500 of wages earned for the year. Determine the following taxes:
Employee OASDI
Employee HI
Employer OASDI
Employee HI
Problem 4.6
The wags for several employees are listed below. Assume that the OASDI rate is 6.4% and the HI rate is 2%. Determine the taxable wages for one biweekly pay period (two weeks) and determine the FICA taxes for the employee and the employer.
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Employee
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Wages
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No. 1
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$620 weekly
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No. 2
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$680 weekly
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No. 3
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$4,200 monthly
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No. 4
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$5,300 monthly
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No. 5
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$5,800 monthly
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No. 6
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$48,000 annually
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No. 7
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$52,000 annually
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Totals
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Employer's OASDI
Employer's HI
Refer to the partially completed payroll register from last week. You will now determine the amount of FICA taxes for the employee and the employer for the pay period ending January 7. 1. In the Taxable Earnings columns, record the amount of each employee's weekly earnings that is subject to FICA taxes. 2. Using the taxable earnings, compute the OASDI (5.4%) and HI (.65%) taxes for each employee and record in the appropriate column. 3. Below the worksheet, in the space provided, use the total wages to calculate the employer's FICA obligation. Note the employer's FICA taxes will be used in module 10 for the journal entry. Keep your partially completed payroll register for use in the next module.
Attachment:- Module_04_Assignment.xlsx