4-6A Damerly Company (a California employer) wants to give holiday bonus
check of $250 to each employee. Since it wants the check amount to be
$250, it will need to gross-up the amount of the bonus. Calculate the
withholding taxes and the gross amount of the bonus to be made to John
Rolen if his cumulative earning for the year are $46,910. Besides being
subject to social security taxes and federal income tax (supplemental
rate), a 6% California income tax must be withheld on supplemental
payments.
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