# Question & Answer: FUTA and SUTA taxes…..

FUTA and SUTA taxes

The partnership of Cox and Cohen paid the following wages during this year:

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 Employee Position Wages M. Cox partner 45,000 S. Cohen partner 26,000 N. Tate supervisor 14,350 T. Gerenski factory worker 9,900 R. Sobowski factory worker 9,450 D. Brunder factory worker 8,910 S. Carsoni bookkeeper 11,100 C. Chu maintenance 3,900

In addition, the partnership owed \$200 to Chu for work he performed during December. However, payment for this work will not be made until January of the following year. The state unemployment tax rate for the company is 2.95% on the first \$9,000 of each employee’s earnings. Compute:

a) Net FUTA tax for the partnership for this year

b) SUTA tax for this year

Solution:

SUTA Tax

Employee earn per year = 9,000

SUTA Rate = 2.95%

Caluculation:

9,000 * 0.0295

= 265.5

Each employes suta is 265.5

8 Employee SUTA is 265.5 * 8

= 2,124

OR

7,000 * 0.0295

206.5

206.5 * 8

=1,652

Caluculation of FUTA Tax:

Employee Earn per year = 9,000

Rate = 0.295

= 9,000 * 0.0295

=265.5

Owed money for both SUTA and FUTA

265.5 – 200

=65.5

Remianing 7 Employees 265.5 * 7

1,858.5 + 65.5

=1,924

OR

= 65.5 * 8

= 524