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I am not understanding this problem can you help me with it? ONEILL, Joseph Tyler,...

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Accounting

I am not understanding this problem can you help me with it?

ONEILL, Joseph Tyler, 2100 Broad Street, Philadelphia, PA 19121-7189. Married, claiming 3 withholding allowances. Telephone, 555-2332.Social Security No. 000-00-1534. Position, president. Salary, $60,000 per year. Group insurance, $90,000. Department: Administrative.

In this pay, the president of the company, Joseph ONeill, is paid his annual bonus. This does not affect ONeills insurance coverage, which is based on regular pay. This year, his bonus is $75,000. For withholding purposes, the bonus is considered a supplemental payment and is added to his gross pay, and the aggregate amount is taxed. For this pay, ONeill has increased his SIMPLE deduction to $4,000. To determine the federal income tax, use the Table of Allowance Values along with Tax Table A (pages T-2 to T-4). In calculating the tax, do not round the aggregate to the nearest earnings dollar. In this pay, ONeill has reached the OASDI ceiling. To calculate ONeills OASDI tax, multiply the OASDI ceiling of $128,400 by 6.2 percent and then subtract the year-to-date OASDI taxes withheld up to this pay. (Use ONeills Employee Earnings Record to view his year-to-date OASDI tax withheld).

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