Tom's Gross Pay for the Month Is $2,400

question 127

Multiple Choice

Tom's gross pay for the month is $2,400. Tom's deduction for federal income tax is based on a rate of 20%. Tom has no voluntary deductions. Tom's yearly pay is under the limit for OASDI. What is the amount of FICA withheld from Tom's pay? (Assume a FICA-OASDI Tax of 4.2% and FICA-Medicare Tax of 1.45%.)

• A)$615.60
• B)$135.60
• C)$480.00
• D)$296.40

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Definitions:

Save

The act of putting money aside in a safe place for future use or investment, typically in a bank account or other financial instrument.

Years

A unit of time equivalent to 365 or 366 days, used to measure durations or periods on a calendar basis.

Payments

Transactions involving the transfer of money from one party to another, often in exchange for goods or services.

Interest Rate

The borrowing cost that a lender imposes on a borrower, designated as a percentage of the principal for the use of property or money.