1. Thomas is an employer with one employee, Sarah. Sarah's wages are $19,450, and the state unemployment tax rate is 5.4 percent.
Calculate the following amounts for Thomas:
a. FUTA tax before the state tax credit
b. State unemployment tax
c. FUTA tax after the state tax credit
2. Sally hires a maid to work in her home for $260 per month. The maid is 25 years old and not related to Sally. During 2016, the maid worked 10 months for Sally.
a. What is the amount of Social Security tax Sally must pay as the maid's employer?
b. What is the amount of Medicare tax Sally must pay as the maid's employer?
Sally's employer's Medicare tax:
c. What is the amount of Social Security and Medicare tax which must be withheld from the maid's wages?
Sally should withhold for Social Security and Medicare tax of
3. Ann hires a nanny to watch her two children while she works at a local hospital. She pays the 19-year-old nanny $165 per week for 46 weeks during the current year.
a. What is the employer's portion of Social Security and Medicare tax for the nanny that Ann should pay when she files her Form 1040 for 2016?
b. What is the nanny's portion of the Social Security and Medicare tax?
4. Married taxpayers Otto and Ruth are both self-employed and file a joint return. Otto earns $352,000 of self-employment income and Ruth has a self-employment loss of $13,500.
How much Medicare surtax for high income taxpayers will Otto and Ruth have to pay with their 2016 income tax return?
5. Married taxpayers Otto and Ruth are both self-employed and file a joint return. Otto earns $354,600 of self-employment income and Ruth has a self-employment loss of $59,100.
How much Medicare surtax for high income taxpayers will Otto and Ruth have to pay with their 2016 income tax return?