Question

6. Victor expects his gross income to be $48,000 this year, but Social Security, Medicare, federal income tax, and state income tax will be deducted from his pay. Victor lives in Illinois, which has a flat state income tax of 4.95%, and he expects that 22% of his gross income will be withheld for federal income tax. He wants to calculate his projected take-home pay for the year. (5 points: Part I - 1 point; Part II - 1 point; Part III - 1 point; Part IV - 1 point; Part V - 1 point)Part I: How much of Victor's gross income will be taken out for Social Security?Part II: How much of Victor's gross income will be taken out for Medicare?Part III: How much of Victor's gross income will be taken out for federal income tax?Part IV: How much of Victor's gross income will be taken out for state income tax?Part V: What is Victor's projected take-home pay for the year?

Answer 1

gross income = $48,000

state income tax Illinois = 4.95%

federal income tax = 22%

social security = 6.2% (I have looked up on the Internet)

medicare = 1.45% (I have looked up on the Internet)

Part I

6.2% = 6.2 / 100 = 0.062

$48,000 x 0.062 = $2,976

Social Security will take $2,976 from Victor's gross income.

Part II

1.45% = 1.45 / 100 = 0.0145

$48,000 x (0.0145) = $696

Medicare will take $696 from Victor's gross income.

Part III

22% = 22 / 100 = 0.22

$48,000 x 0.22 = $10,560

Federal income tax will take $10,560 from Victor's gross income.

Part IV

4.95% = 4.95 / 100 = 0.0495

$48,000 x 0.0495 = $2,376

State income tax will take $2,376 from Victor's gross earnings.

Part V

Take-home pay will be:

gross incomes - (total tax, social security and medicare cost)

$48,000 - ($2,976 + $696 + $10,560 + $2,376)

$48,000 - $16,608

Take-home pay = $31,392