Share
Explore BrainMass

Johansen tax deduction for payroll and related taxes

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?

Solution Preview

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 ...

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.

$2.19