Chapter 2 Review Net Pay

Vocabulary Review

  1. An amount subtracted from gross pay is a(n) _?_. deduction
  1. Total income in a year that includes income fromwages, salaries, commissions, bonuses, tips, interest, dividends, prizes, pensions, the sale of stock. and profit from a business is called _?_. Gross Income
  1. Adjusted gross income less deductions and exemptions is _? _. taxableincome
  1. A tax in which the rate does not vary with the amount of income is (a, an) _? _. flattax
  1. Gross pay less deductions is _? _. netpay
  1. Things of value provided by employers in addition to wages are _? _. employeebenefit
  1. The amount left after subtracting adjustments to income from gross income is _? _. adjustedgrossincome
  1. An amount of income per person that is free from tax is called a(n) _?_. exemption

2-1 Deductions from Gross Pay

  1. Christy Bellows is a married worker earning $612.83 each week. She claims 3 withholding allowances. What amount should be deducted from her week earnings for federal withholding taxes? $26
  1. Ron Adams earns $450 in gross wages on January 10. How much is deducted from Ron's gross wages for Social Security at 6.2 % and Medicare at 1.45 %? $27.90; $6.53
  1. Luisa Medina is paid $556 a week. Her employer deducts $56 for federal withholding tax, $54.78 for insurance, 6.2 % for Social Security taxes, and 1.45 % for Medicare taxes. For the week, what are her Social Security and Medicare taxes, total deductions, and net pay? $34.47; $8.06; $153.31, $402.69

2-2 Federal Income Taxes

  1. Freida Werner earned gross income of $45,600 last year. She made payment; into an approved retirement plan of $3,600. What was her adjusted gross income last year? $42,000
  1. Jorge Viscano had $38,000 in adjusted gross income last year. He took the standard deduction of $5,450 and one exemption for himself for $3,500. What was his taxable income for the year? $29,050
  1. Ben Uris is single, has taxable income of $23,500, and his employer deducted $3,640 in withholding taxes. Find Ben's tax due and any refund or amount
    owed.$3,138; $502 refund
  1. Elena Alvarez is a high school student and her parents claim her as a dependent on their tax return. Elena works part-time and earned $2,490 last year. Her employer deducted $320 in withholding taxes. Elena also earned $320 in interest on a savings account and had no adjustments to income. Elena wants to file for a refund and claim the standard deduction instead of itemizing deductions. What is the amount of Elena's refund?$318

2·3 State and City Income Taxes

  1. Alan Grey has federal taxable income of $31,500. He pays a state income tax rate of 3.5% on his federal taxable income. Find his state income tax.$1,102.50
  1. Ham Umenski's taxable income is $44,200. Find her state income tax if she pays $1,600 plus 7% of her taxable income over $40,000. $1,894

2·4 Benefits and Job Expenses

  1. Juan Romero earns a gross pay of $44,500. His employee benefits are 18% of his
    gross pay. What are his total job benefits? $52,510
  1. Shirley Evans earns $20.50 per hour, working 40 hours a week, 50 weeks a year. Her employee benefits include $1,200 per year for health insurance and $500 per year for free parking. Her expenses include $325 for dues and $1,300 for commuting. What are Shirley's net job benefits? $41,075
  1. Phyllis Regan's job pays $46,350 plus 24% of wages in benefits. She estimates that her yearly job expenses are $2,256. A job she has been offered pays $49,750 with these estimated benefits: $3,980 in pensions, $450 in free parking, $1,080 in paid vacation, $1,560 in paid holidays, $2,100 in health insurance, and $400 in tools. The job has job expenses of $2,624. Which job offers the greater net job benefits? How much greater? 2nd; $1,478
  1. Ursala Thomas had the following job expenses for last year: union dues, $388; licenses, $109; commuting costs, $1,478. Her total job benefits for the same period were $39,256. Find her net job benefits. $37,281

2·5 Analyze Take-Home Pay

  1. JoePalucci earns $2,500 per month. Out of those wages, $266 in federal income taxes, $191.25 in FICA taxes, $100 in state income taxes, and $125 in health insurance premiums were deducted. Find the percentage of gross pay that Joe takes home, to the nearest percent. 73%
  1. Maggie Ryan earns $350 a week at her job. She is given a 7% raise. She is a single taxpayer who claims one withholding allowance. Federal, FICA, and a 4% state income tax are withheld from her wages. What is the increase in her gross wages? How much does her net pay increase per week with herraise? $24.50; $18.65
  1. Joe Marlow's weekly wages are $585. He has federal withholding, FICA, and $125 for health insurance. deducted from his check. He is married and claims 2 withholding allowances. How much will he save in taxes if he has his health insurance deductedbefore taxes?$21.56