Question

Sydney, OASDI Example 2, has earnings to date of $131,500 and current wages of $4,000. To determine how much of her current earnings will be subject to OASDI, add earnings to date and current wages, $131,500 + $4,000 = $135,500. Then subtract from this the OASDI cap, $135,500 - $132,900 = $2,600. This is amount that exceeds the OASDI cap and is not subject to tax. What should be taxed? Begin with current wages and subtract the excess amount, $4,000 - $2,600 = $1,400. This amount will be with held on at the OASDI rate of 6.2% or $86.80. Tackle It Note: Round to the nearest cent. Michael Jordan has earned to date $130,400 and has current earnings of $7,172. Employee: Jordan, Michael Earnings to Date: Current Earnings: $130,400.00 $7,172.00 OASDI Withholding: Yes Medal Points No In this scenario, did gross earnings partially exceeded the OASDI cap?

Answer 1

Taxable current earnings	2500	=132900-130400
OASDI withholding	155	=2500*6.2%
Employee: Jordan, Michael
Earnings to Date:	$130,400.00
Current Earnings:	$7,172.00
OASDI Withholding:	$155.00
Yes, Gross earnings partially exceed the OASDI cap