Question

PLEASE HELP AHH- KS Perez pays 12% average tax rate on gross pay in federal taxes. KS also pays $100 into a 401(k) retirement fund each pay period and pays a $200 per-pay-period contribution to an employer-subsidized health insurance policy. complete KS’s earnings statement below. Round your answer to the nearest dollar.

Answer 1

Completing KS Perez's earnings statement are as follows:

Gross pay this period = $2,000

Gross pay YTD = $52,000

Federal Income Tax = $9,724

Virgin Income Tax = $2,284

FICA Social Security = $2,740

FICA Medicare = $641

Adjusted Gross Income = $44,200

Other Deductions:

Health Insurance = $5,200

401 Contributions = $2,600

Total other deductions = $7,800

Data and Calculations:

Hourly rate = $25

Hours worked per pay period = 80 hours

Bi-weekly earnings =$2,000 ($25 x 80)

Year to date total gross income = $52,000 ($2,000 x 52/2)

Federal Income Tax Rate = 22% = $9,724 ($44,200 x 22%)

Virginia Income Tax Rate = $720 + 5.75% over $17,000

= $720 + ($27,200 x 5.75%)

= $2,284 ($720 + $1,564)

FICA Social Security = 6.2% = $2,740 ($44,200 x 6.2%)

FICA Medicare = 1.45% = $641 ($44,200 x 1.45%)

Other Deductions:

Health Insurance = $5,200 ($200 x 26)

401 Contributions = $2,600 ($100 x 26)

Total other deductions = $7,800 ($5,200 + $2,600)

• Adjusted Gross Income = $44,200 ($52,000 - $7,800)

Thus, the adjusted gross income of KS Perez for the year is $44,200.

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