Owed to the IRS

The video tutorial explains payroll deductions, focusing on net pay, gross earnings, and tax withholdings. It details the shared responsibilities of Social Security and Medicare taxes between employers and employees. The tutorial provides methods for calculating gross earnings and taxes, using case studies of Jasmine and Caroline to illustrate these calculations. It also covers employer responsibilities in tax remittance and the implications for self-employed individuals.

What is the difference between an employee's gross earnings and net pay?

• Net pay includes only federal taxes.

• Gross earnings include all deductions, while net pay is before deductions.

• Gross earnings are the total earnings before deductions, while net pay is after deductions.

• Net pay is the total earnings before any deductions.

Which taxes are shared between an employer and an employee?

• 401K contributions

• State income tax

• Federal income tax

• Social Security and Medicare taxes

What percentage of Social Security tax is owed by both the employer and the employee?

• 10%

• 1.45%

• 6.2%

• 7.65%

How is the amount owed to the IRS by an employer calculated for an employee?

• By subtracting state taxes from federal taxes

• By only considering the federal income tax withheld

• By doubling the sum of Social Security and Medicare taxes plus federal income tax withheld

• By adding all state and federal taxes withheld

What is the responsibility of a self-employed individual regarding Social Security and Medicare taxes?

• They pay only half of the tax amount.

• They pay only the Medicare tax.

• They are exempt from these taxes.

• They are responsible for the entire tax amount.