Question

Sophie is a single taxpayer. For the first payroll period in October 2017, she is paid wages of $2,900.00 monthly. Sophie claims two allowances on her Form W-4.

Table for Allowances Amount per Circular E.

Payperiod 2017 Allowance Amount

Weekly $ 77.90

Biweekly 155.80

Semimonthly 168.80

Monthly 337.50

Quarterly 1,012.50

Semiannually 2,025.00

Annually 4,050.00

Round intermediate computations and your final answer to two decimal places.

a. Use the percentage method to calculate the amount of Sophie's withholding for a monthly pay period. Sophie's withholding: $

b. Use the wage bracket method to determine the amount of Sophie's withholding for the same period. $

Answer 1

Answer a:

Monthly Gross Wages = $2,900.00

Pay period 2017 Allowance Amount Monthly 337.50

Sophie claims two allowances

Hence Allowance amount = $337.50 * 2 = $675

Gross Wages - Allowances = $2,900 - $675 =$2,225

Using the percentage method to calculate the amount of Sophie's withholding for a monthly pay period. Sophie's withholding = $77.70 plus 15% of amount over $969 = $77.70 + 15% * ($2,225 - $969) = $266.10

Using the percentage method to calculate the amount of Sophie's withholding for a monthly pay period. Sophie's withholding = $266.10

Answer b:

Filing status: Single

Monthly wages

Two allowances

Using the wage bracket method to determine the amount of Sophie's withholding for the same period for monthly salary of $2,900 with two allowances = $266