hardest by the financial realities of the Great Depression and the hardships of the future, and also help to give elderly citizens a means for retirement, thus creating more openings in the job market. To pay for this program, the government enacted a payroll tax on workers’ wages, thus the Social Security Tax. Half of the tax would be paid by the worker, and half would be paid to the employer (Social Security Administration). The amount raised each year has risen with the increase in the number of
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addresses legal requirements and how the offered rewards affect the organization’s ability to retract and retain key employees. Social Insurance Social Security benefits, mandated by law, are financed by both the employer and employee. Employer’s payroll tax equals 6.2% and employees’ equals 4.2% through 2012 (IRS, 2012). The maximum taxable earnings amount is $110,100. The Medicare tax rate is 1.45% for both employers and employees. There is no limitation for taxable earnings on Medicare taxes
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federal poverty level. In 2012 for instance, the federal poverty level for an individual was $11,170, so an individual at 150 percent of federal poverty level earned $16,755. How are Medicare and Medicaid funded? Medicare is partially funded from payroll taxes, through the provisions of the Federal Insurance Contributions Act. The Medicare tax rate is currently 2.9 percent-half withheld from employees’ pay and half provided by employers. High-income social security beneficiaries are required to pay
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P11-26A Requirement 1 Louis Welch | Payroll for the year ended December 31, 2014 | | Calculation | Annual | Gross Pay: | | | Salary | $10,200 × 12 | $ 122,400 | Bonus | $122,400 × 10% | 12,240 | Total Gross Pay | | $ 134,640 | | | | Deductions: | | | Federal Income Tax | ($850 × 12) + $924 | $ 11,124 | State Income Tax | ($70 × 12) + $40 | 880 | FICA—OASDI | 4.2% first 110,100 | 4,624 | FICA—Medicare | 1.45% × $134,640 | 1,952 | Charity Fund | 1% × 134,640
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| Debit | Credit | Payroll tax | | 352.16 | FICA tax | 198.40 | | State Unemployment tax | 133.92 | | Federal unemployment tax | 19.84 | | | $352.16 | $352.16 | E10-6 E10-8 1. True 2. True 3. False 4. True 5. False 6. False 7. True 8. True 9. True 10. True E10-18 A. | Debit | Credit | Cash | | 562,613 | Discount on Bonds Payable | | 37,387 | Bonds Payable | 600,000 | | | $600,000 | $600,000 | B. | Debit | Credit |
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FICA stands for Federal Insurance Contributions Act, which is a taxation on income earned where the funds are used for federal programs that provide benefits for U.S. citizens and permanent residents when they retire, are disabled, or are the children of deceased workers. The FICA tax includes two separate taxes. Funds withheld for FICA are reflected on paycheck stubs and on the W-2. One is social security tax and the other is the Medicare tax which different rates apply for each tax. The current
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Assignment from Text – Jamie Oswalt 16-33 a. The payroll procedures at the Galena plant do contain some shortcomings. The first one is that the supervisors in the production department are not approving actual hours. Another one found is that payroll clerk seems to be in charge of most duties, which clearly signifies a lack of segregation of duties. Finally, the employee from the personnel department should not be the one to have access to the payroll checks and hold them until time for delivery.
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and Medicare users. This is because the money that the government loans itself to try and cover a deficit, comes primarily from the Social Security Fund. However, as more people retire, they draw more Social Security funds than are replaced with payroll taxes. With less money in the Social Security Fund it will mean other programs, such as Medicare must be cut, taxes must be raised or Social Security benefits must be lowered. This will result in lower payments to future Social Security users. This
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likely to pay a lifetime of payroll taxes and then die without receiving much in the way of benefits. On the other hand, Social Security is favorable to Hispanics because of their above average life expectancy and the progressive nature of the benefit formula. As a result, Hispanics derive a higher return than whites and substantially higher than blacks. I do not believe that the Social Security system promotes income equality because Social Security is a payroll tax and it is taxed on wages
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. . . . . . . . . . . . . . . . 11 5. Wages and Other Compensation . . . . . . . . . . . . 11 6. Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 7. Supplemental Wages . . . . . . . . . . . . . . . . . . . . . 15 8. Payroll Period . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 9. Withholding From Employees’ Wages . . . . . . . . 16 10. Required Notice to Employees About the Earned Income Credit (EIC) . . . . . . . . . . . . 20 11. Depositing Taxes . . . .
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