Edward F. Stockton, PC is a small local Certified Public Accounting (CPA) firm owned and operated by Edward F. Stockton. The firm was organized on July 1, 1991.
For small to mid-sized business, I offer traditional services such as auditing, compilation, reviews, tax preparation, and representation before the Internal Revenue Service. I also provide employee training, controllership and consulting services.
I am a Certified Public Accountant, a Certified QuickBooks ProAdvisor, and a member of the Peachtree Accountant’s Network. I am also a member of the Georgia Society of Certified Public Accountants and a member of the American Institute of Certified Public Accountants.
I have provided auditing services for small companies with assets of $1,000,000 to large companies with assets of up to $200,000,000. This included heavily regulated companies such as government subsidized housing developments.
Consulting services included pay rate studies, job descriptions, policy formulation and implementation, internal control studies, development of accounting and reporting systems, cost allocation plans, and market analysis. We help with correcting deficient accounting records, i.e., we clean up accounting messes.
We also provide tax preparation and planning services to individuals as well as representation before the Internal Revenue Service.
Question — What is the wage base for FICA taxes.
Answer — FICA taxes are composed of two components – Social Security Taxes and Medicare Taxes. Wages are subject to Social Security Taxes of 6.2% on the first $97,500 of wages for 2007. Medicare Taxes are equal to 1.45% of wages and there is no wage limit on Medicare Taxes. In addition, the employer must match the amount withheld from the employees wages.
A self employed person pays 12.4% in Social Security Taxes on up to $97,500 in wages for 2007 or $12,090. A self employed person also pays 2.9% of Medicare Taxes on all wages for which there is no wage limit. If a self employed person’s wages were $97,500 the Medicare Taxes would be $2,827.50. The total tax a self employed person would pay on $97,500 of wages for FICA Taxes would be $14,917.50.
If a self employed person’s wages were $100,000.00, the additional tax on those wages in excess of $97,500 would be $72.50 ($100,000 – $97,500 = $2,500 X 2.9%).
Question – What is the taxable wage base for Federal Unemployment Taxes.
Answer — For 2007, the FUTA tax rate is 6.2%. This tax applies to the first $7,000 of wages paid to employees each year. The $7,000 wage base applies only to Federal Unemployment Taxes. Your state wage base may be different. For example, the wage base for Georgia is $8,500. Generally, you may take a credit against your FUTA taxes for the amount you paid into your state’s unemployment tax fund. This credit can not be more than 5.4% of taxable wages. If you are able to claim the maximum credit, your tax rate would be .8% or .008.
In practice, it is rare for anyone to pay more than .8% of employee wages in FUTA tax. The FUTA tax on $7,000 would be $56.
