Question

. A Social Security rate of 6.2 % is deducted on the first 90,000 you earn. A Medicare rate of 1.45% is deducted from all your earnings. 1) Mitchell Gomez is an auto mechanic. His annual gross salary is 35,500. He is married with 1 dependent, allowing him 3,700 in yearly personal exemptions. If his state income tax is based on the following graduated rate, how much is withheld from his semi-monthly paycheck? I State Tax Rate Annual Income Earned 3.25% 3.60% 4.90% First 15,000 Next 15,000 Over 30,000 Solution:​

How much is withheld from Mitchell Gomez's semi-monthly paycheck?

Options:
A) 150
B) 200
C) 250
D) 300

Answer 1

To determine the semi-monthly withholding amount for Mitchell Gomez, calculate the annual Social Security and Medicare deductions of 6.2% and 1.45% from his gross salary, respectively, apply the state's graduated tax rates, and divide by 24 pay periods.

Step-by-step explanation:

The question is asking to calculate the amount withheld from Mitchell Gomez's semi-monthly paycheck considering his gross salary, the Social Security and Medicare deductions, as well as state income tax rates. To find the semi-monthly withholding amount, we first calculate the annual Social Security and Medicare deductions based on his gross annual salary. Then, we add those deductions to the state tax, which is a graduated rate, and divide by the number of pay periods to get the semi-monthly deduction.

Mitchell earns $35,500 annually. His annual Social Security deduction is $35,500 * 6.2% and the Medicare deduction is $35,500 * 1.45%. The state tax follows a graduated scale, thus the first $15,000 is taxed at 3.25%, the next $15,000 at 3.6%, and the remaining $5,500 is taxed at 4.9%. Finally, the total amount of these deductions is divided by 24, the number of semi-monthly paychecks in a year, to obtain the amount deducted per paycheck.