Johansen tax deduction for payroll and related taxes
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For the current month, Johansen Rubber Cement Co. incurred
payroll expenses as follows:
Gross salaries and wages $675,000
Payroll Taxes:
OASDI (Social Security Tax) employer's share $41,850
HI (Medicare tax)--employer's share $9,788
Total: $726,638
Amounts withheld and paid to the government:
Employee income taxes withheld $(108,990)
OASDI--employees's share $(41,850)
HI--employees's share $(9,788)
Total: $(160,628)
a. What amount can Johansen Rubber Cement Co. claim as a tax deduction for
salary and wage expense?
b. How much can Johansen Rubber Cement Co. deduct as tax expense?
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Solution Summary
The solution calculates the amount that Johansen Rubber Cement can claim as a tax deduction for salary and wage expense plus employer payroll tax expense.
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a. Johansen Rubber Cement Co can claim the total amount of the gross salaries and wages plus the employer share of tax expense over and above the gross ...
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