Answer :
### Given Data:
- Social Security tax rate: [tex]\(6.2\%\)[/tex]
- Medicare tax rate: [tex]\(1.45\%\)[/tex]
- FUTA tax rate: [tex]\(0.6\%\)[/tex]
- SUTA tax rate: [tex]\(5.4\%\)[/tex]
- Social Security limit: [tex]\(\$137,700\)[/tex]
- FUTA and SUTA limit: [tex]\(\$7,000\)[/tex]
### Gross Earnings:
- Situation (a): \[tex]$5,000 - Situation (b): \$[/tex]7,000
- Situation (c): \[tex]$8,000 ### Calculating Taxes: #### Situation (a): Gross Earnings = \$[/tex]5,000
1. Social Security Tax:
[tex]\[ \text{Social Security Tax} = 0.062 \times \$5,000 = \$310.00 \][/tex]
2. Medicare Tax:
[tex]\[ \text{Medicare Tax} = 0.0145 \times \$5,000 = \$72.50 \][/tex]
3. FUTA Tax:
[tex]\[ \text{FUTA Tax} = 0.006 \times \$5,000 = \$30.00 \][/tex]
4. SUTA Tax:
[tex]\[ \text{SUTA Tax} = 0.054 \times \$5,000 = \$270.00 \][/tex]
#### Situation (b): Gross Earnings = \[tex]$7,000 1. Social Security Tax: \[ \text{Social Security Tax} = 0.062 \times \$[/tex]7,000 = \[tex]$434.00 \] 2. Medicare Tax: \[ \text{Medicare Tax} = 0.0145 \times \$[/tex]7,000 = \[tex]$101.50 \] 3. FUTA Tax: \[ \text{FUTA Tax} = 0.006 \times \$[/tex]7,000 = \[tex]$42.00 \] 4. SUTA Tax: \[ \text{SUTA Tax} = 0.054 \times \$[/tex]7,000 = \[tex]$378.00 \] #### Situation (c): Gross Earnings = \$[/tex]8,000
1. Social Security Tax:
[tex]\[ \text{Social Security Tax} = 0.062 \times \$8,000 = \$496.00 \][/tex]
2. Medicare Tax:
[tex]\[ \text{Medicare Tax} = 0.0145 \times \$8,000 = \$116.00 \][/tex]
3. FUTA Tax:
[tex]\[ \text{FUTA Tax} = 0.006 \times \$7,000 = \$42.00 \][/tex]
4. SUTA Tax:
[tex]\[ \text{SUTA Tax} = 0.054 \times \$7,000 = \$378.00 \][/tex]
### Summary of Calculations:
Situation (a): Gross Earnings = \[tex]$5,000 - Social Security Tax: \$[/tex]310.00
- Medicare Tax: \[tex]$72.50 - FUTA Tax: \$[/tex]30.00
- SUTA Tax: \[tex]$270.00 Situation (b): Gross Earnings = \$[/tex]7,000
- Social Security Tax: \[tex]$434.00 - Medicare Tax: \$[/tex]101.50
- FUTA Tax: \[tex]$42.00 - SUTA Tax: \$[/tex]378.00
Situation (c): Gross Earnings = \[tex]$8,000 - Social Security Tax: \$[/tex]496.00
- Medicare Tax: \[tex]$116.00 - FUTA Tax: \$[/tex]42.00
- SUTA Tax: \$378.00
- Social Security tax rate: [tex]\(6.2\%\)[/tex]
- Medicare tax rate: [tex]\(1.45\%\)[/tex]
- FUTA tax rate: [tex]\(0.6\%\)[/tex]
- SUTA tax rate: [tex]\(5.4\%\)[/tex]
- Social Security limit: [tex]\(\$137,700\)[/tex]
- FUTA and SUTA limit: [tex]\(\$7,000\)[/tex]
### Gross Earnings:
- Situation (a): \[tex]$5,000 - Situation (b): \$[/tex]7,000
- Situation (c): \[tex]$8,000 ### Calculating Taxes: #### Situation (a): Gross Earnings = \$[/tex]5,000
1. Social Security Tax:
[tex]\[ \text{Social Security Tax} = 0.062 \times \$5,000 = \$310.00 \][/tex]
2. Medicare Tax:
[tex]\[ \text{Medicare Tax} = 0.0145 \times \$5,000 = \$72.50 \][/tex]
3. FUTA Tax:
[tex]\[ \text{FUTA Tax} = 0.006 \times \$5,000 = \$30.00 \][/tex]
4. SUTA Tax:
[tex]\[ \text{SUTA Tax} = 0.054 \times \$5,000 = \$270.00 \][/tex]
#### Situation (b): Gross Earnings = \[tex]$7,000 1. Social Security Tax: \[ \text{Social Security Tax} = 0.062 \times \$[/tex]7,000 = \[tex]$434.00 \] 2. Medicare Tax: \[ \text{Medicare Tax} = 0.0145 \times \$[/tex]7,000 = \[tex]$101.50 \] 3. FUTA Tax: \[ \text{FUTA Tax} = 0.006 \times \$[/tex]7,000 = \[tex]$42.00 \] 4. SUTA Tax: \[ \text{SUTA Tax} = 0.054 \times \$[/tex]7,000 = \[tex]$378.00 \] #### Situation (c): Gross Earnings = \$[/tex]8,000
1. Social Security Tax:
[tex]\[ \text{Social Security Tax} = 0.062 \times \$8,000 = \$496.00 \][/tex]
2. Medicare Tax:
[tex]\[ \text{Medicare Tax} = 0.0145 \times \$8,000 = \$116.00 \][/tex]
3. FUTA Tax:
[tex]\[ \text{FUTA Tax} = 0.006 \times \$7,000 = \$42.00 \][/tex]
4. SUTA Tax:
[tex]\[ \text{SUTA Tax} = 0.054 \times \$7,000 = \$378.00 \][/tex]
### Summary of Calculations:
Situation (a): Gross Earnings = \[tex]$5,000 - Social Security Tax: \$[/tex]310.00
- Medicare Tax: \[tex]$72.50 - FUTA Tax: \$[/tex]30.00
- SUTA Tax: \[tex]$270.00 Situation (b): Gross Earnings = \$[/tex]7,000
- Social Security Tax: \[tex]$434.00 - Medicare Tax: \$[/tex]101.50
- FUTA Tax: \[tex]$42.00 - SUTA Tax: \$[/tex]378.00
Situation (c): Gross Earnings = \[tex]$8,000 - Social Security Tax: \$[/tex]496.00
- Medicare Tax: \[tex]$116.00 - FUTA Tax: \$[/tex]42.00
- SUTA Tax: \$378.00