80.2K

Verified Solution

Link Copied!

George Clausen $($age $48)$ is employed by Kline Company and is paid an annual salary of $$42,640.$ He has just decided to join the company's Simple Retirement Account $($IRA form$)$ and has a few questions. Answer the following for Clausen: Round your answer to the nearest cent.

As we go to press, the federal income tax rates for $2021$ are being determined by budget talks in Washington and not available for publication. For this edition, the $2020$ federal income tax tables for Manual Systems with Forms W$-4$ from $2020$ or later with Standard Withholding and $2020$ FICA rates have been used.

a$.$ What is the maximum that he can contribute into this retirement fund?

$fill in the blank $1$

$-$

b$.$ What would be the company's contribution?

$fill in the blank $2$

$1,279\mathrm{.}20$

Note: For items c$.$ & d$.$ below, round interim amounts to two decimal places. Use these values in subsequent computations then round final answer to two decimal places.

c$.$ What would be his weekly take$-$home if he contributes the maximum allowed retirement contribution $($married filing jointly, wage$-$bracket method, and a $2\mathrm{.}3\%$ state income tax on total wages$)?$

Click here to access the Wage$-$Bracket Method Tables.

$fill in the blank $3$

$-$

d$.$ What would be his weekly take$-$home pay without the retirement contribution deduction?

$fill in the blank $4$

$-$

Answer & Explanation Solved by verified expert

See Answer