Question

Tiffany Baldwin earns $800 every week. Her federal income tax is $25. Her state tax is $11. Her FICA is 7.65% of his gross salary. She contributes 2% of her gross earnings to a 401K. She has $20 per paycheck deducted post-tax to pay for her gym membership. What are her pre-tax deductions?

Answer 1

Tiffany Baldwin's pre-tax deductions are the parts of her salary that she does not have to pay income tax on. Those include the parts of her salary that already go to taxes, which are her federal income tax, state income tax, and her FICA (Social Security and Medicare) taxes. Those taxes are $25 + $11 + ($800 x .0765) = $97.20. Baldwin's other pre-tax deduction is her contribution to her 401K retirement account, which is $800 x .02 = $16. So, her total pre-tax deductions for a week are $97.20 + $16 = $113.20. The amount she has taken out for her gym membership is "post-tax", meaning she still has to pay income tax on that $20 every week, so this is not included.