Asked by Thomas Scahill on May 22, 2024
Verified
During the first quarter, Jason Beverage Distributors paid wages of $978,800. Of this amount, $146,000 was paid to employees who had been paid $7,000 earlier in the quarter. What was the employer's liability for FUTA and SUTA taxes, assuming that the state rate was 5.7%? (Round down to the nearest $1.)
FUTA
The Federal Unemployment Tax Act, which imposes a payroll tax on businesses to fund state workforce agencies.
SUTA
State Unemployment Tax Act, the legislation enabling state governments to collect unemployment insurance taxes from employers.
State Rate
A specific tax or fee rate determined by a state government, often applied to sales, income, or property.
- Ascertain the liability of businesses for taxes under the Federal Unemployment Tax Act and State Unemployment Tax Act by evaluating designated earnings information and state-specific rates.
- Apply knowledge of tax rates and thresholds to compute exact tax liabilities.
- Comprehend the effect of prior earnings on current quarter tax obligations for Federal Unemployment Tax Act (FUTA) and State Unemployment Tax Act (SUTA).
Verified Answer
TS
Taylor SmithMay 25, 2024
Final Answer :
$54,131
$978,800 $146,000 = $832,800 subject to FUTA and SUTA taxes
$832,800 0.008 = $6,662.4 FUTA tax payment
$832,800 0.057 = $47,469.6 SUTA tax payment
$6,662.4 + $47,469.6 SUTA tax payment = $54,132
$978,800 $146,000 = $832,800 subject to FUTA and SUTA taxes
$832,800 0.008 = $6,662.4 FUTA tax payment
$832,800 0.057 = $47,469.6 SUTA tax payment
$6,662.4 + $47,469.6 SUTA tax payment = $54,132
Learning Objectives
- Ascertain the liability of businesses for taxes under the Federal Unemployment Tax Act and State Unemployment Tax Act by evaluating designated earnings information and state-specific rates.
- Apply knowledge of tax rates and thresholds to compute exact tax liabilities.
- Comprehend the effect of prior earnings on current quarter tax obligations for Federal Unemployment Tax Act (FUTA) and State Unemployment Tax Act (SUTA).
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