Chapter 2 Study Guide and Review

Alan 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

Hannah's taxable income is $44,200. Find her state income tax if she pays $1,600 plus 7% of her taxable income of $40,000.

$1,894

Joe'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 deducted before taxes?

$21.56

Maggie 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 her raise?

$24.50; $18.65

Christy 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

George had $38,000 in adjusted gross income last year. he took the standard deduction of $5450 and one exemption for himself for $3500. What was his taxable income for the year?

$29,050

Ben 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

Ron earns $450 in gross wages on January 10. How much in FICA taxes should be deducted from Ron's gross wages? (Use FICA 7.65%)

$34.43

Ursala 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

Louis is paid $556 a week. His employer deducts $56 for federal withholding, $54.78 for insurance, and FICA. What is Louis' net pay?

$402.69

Crystal 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 Crystal's net job benefits?

$41,075

Jillian earns a gross pay of $44,500. Her employee benefits are 18% of her gross pay. What are her total job benefits?

$52,510

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 expenses of $2,624. Which job offers the greater net job benefits? How much greater?

2nd; $1,478

Gross Income

the total amount of income from wages, commissions, tips, etc., before any payroll deductions

net pay

the total earnings paid to an employee after payroll taxes and other deductions

employee benefit

a reward in addition to regular compensation that is provided indirectly to employees

Flat tax

a tax system in which all people pay the same percentage of their income

Taxable Income

adjusted gross income less deductions and exemptions

Deduction

an amount subtracted from gross earnings

exemption

an amount you may subtract from your income for each person who depends on your income to live

Joe 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%

adjusted gross income

The amount remaining when adjustments are subtracted from gross income