Answered

Elrod is an employee of Gomez, Inc. During 2019, Elrod receives a salary of $120,000 from Gomez. What amount should Gomez withhold from Elrod's salary as payment of Elrod's Social Security and Medicare taxes?

Answer :

Answer:

$9,180 should be deducted by Gomez as payment for Medicare and Social Security taxes.

Explanation:

Calculate the employee social security tax:

The rate as at 2019 for computing social security tax is 6.2%

Therefore, amount deducted as social security= 6.2% of gross salary

Given the gross salary= $120, 000

Amount deducted= [tex]\frac{6.2}{100}[/tex] [tex]x 120,000[/tex]

                              = $7,440.

Calculate the amount deducted as Medicare tax:

The rate for Medicare tax is 1.45% of the gross

Amount deducted = [tex]\frac{1.45}{100}x120,000[/tex]

                               =$1,740

Now we sum up the deductions as a result of Medicare and Social security:

Total deductions made= $7,440+$ 1,740= $9,180