Use the information below to create an Income Statementfor the Tudor family.
Watkin and Yolandi combined income is $130,000. Assume theiraverage tax rate including fed/state is 20%. Watkin’s income is$55,000 and Yolandi’s is $75,000. Knowing their individual incomeswill allow us to calculate their FICA taxes. (Use the info below tocalculate the FICA taxes. Only calculate the employee portion.)
Topic 751 - Social Security and Medicare WithholdingRates
Taxes under the Federal Insurance Contributions Act (FICA) arecomposed of the old-age, survivors, and disability insurance taxes,also known as Social Security taxes, and the hospital insurancetax, also known as Medicare taxes. Different rates apply for thesetaxes.
The current tax rate for Social Security is 6.2% for theemployer and 6.2% for the employee, or 12.4% total. The currentrate for Medicare is 1.45% for the employer and 1.45% for theemployee, or 2.9% total. Refer to Publication 15, (Circular E),Employer's Tax Guide, for more information; or Publication 51,(Circular A), Agricultural Employer’s Tax Guide, foragricultural employers.
Only the Social Security tax has a wage base limit. The wagebase limit is the maximum wage that is subject to the tax for thatyear. For earnings in 2018, this base is $128,700.
They each save $500 per month. Their mortgage payment is $3,333per month (PITI), they lease two cars for a total of $6,000 peryear and have college loans payments of $120 per month.
Their utilities are roughly $150 a month and they estimate theyspent about $210 a week on food. The premiums for their autoinsurance totaled to $1600 for the year.
They had some other expenses for 2018 they did not itemize thattotaled to $9,670.
