Instruction 3-1 Use the Following Tax Rates, Ceiling and Maximum Taxes

question 19

Essay

Instruction 3-1
Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI:     6.20%                  $132,900                          $8,239.80
Employee* and Employer HI:           1.45%                  No limit                           No maximum
Self-employed OASDI:                      12.4%                  $132,900                        $16,479.60
Self-employed HI:                                2.9%                    No limit                          No maximum
*Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed.
Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows:
1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimals places (round the hourly rate to 2 decimal places
    before multiplying by one and one-half to determine the overtime rate).
2. If the third decimal place is 5 or more, round to the next higher cent.
3. If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.
Refer to Instruction 3-1 . Ralston is the sole proprietor of Cut & Curl. During the year, his net earnings were $79,700. What are his self-employment taxes (OASDI and HI) on these earnings?

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Definitions:

Cardiac Tamponade

A critical condition where fluid accumulates in the sac surrounding the heart, restricting its ability to pump blood.

Preload

The degree of stretch of the cardiac muscle fibers at the end of diastole, prior to contraction; it affects the force of contraction and cardiac output.

Stroke Volume

The amount of blood the heart pumps out of a ventricle with each beat.

End-diastolic Volume

The volume of blood in the ventricles at the end of diastole, just before the heart contracts, important for determining cardiac function and performance.