Marla Smith, an employee of Clown College, earned $127,000 prior to December. Smith's salary for December is $10,000. For what amount will Smith's December salary be subject to OASDI tax and HI tax, respectively.
A) OASDI $14,000; HI $14,000
B) OASDI $14,000; HI $10,000
C) OASDI $10,000; HI $14,000
D) OASDI $10,000; HI $10,000
B) OASDI $14,000; HI $10,000
Explanation: OASDI is $127,000 - earned amount to date, then salary up to that amount is subject to OASDI; HI there is no limits, so the full salary is subject to that. Ex: $127,000 - $113,000 = $14,000 subject to OASDI; $10,000 HI.
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