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Jonsie earns $1,200 per week. He is married. The Social Security rate is 6.2% on $142,800, and Medicare is 1.45%. Each paycheck, his employer also deducts $42.50 for health insurance. What is his net pay? (Calculate FIT by percentage method.) Note: Round your intermediate calculations and final answer to the nearest cent.

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Answer:

Step-by-step explanation:

First, we need to calculate Jonsie's gross pay for each paycheck:

$1,200 per week x 2 weeks = $2,400

Next, we can calculate the Social Security and Medicare deductions:

Social Security: 6.2% of $142,800 = $8,855.20 (this is the maximum amount that can be taxed for Social Security)

Medicare: 1.45% of $2,400 = $34.80

Now we can calculate Jonsie's taxable income:

$2,400 gross pay - $8,855.20 Social Security - $34.80 Medicare - $42.50 health insurance = $2,477.50

Using the percentage method for federal income tax withholding, we need to calculate Jonsie's FIT based on his taxable income:

$2,477.50 - $1,038 = $1,439.50 taxable income subject to FIT

$1,439.50 x 12% = $173.94 FIT

Finally, we can calculate Jonsie's net pay:

$2,400 gross pay - $8,855.20 Social Security - $34.80 Medicare - $42.50 health insurance - $173.94 FIT = $2,293.56 net pay

Therefore, Jonsie's net pay is $2,293.56.

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