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Edward Dorsey is a part-time employee, and during the biweekly pay period he earned $395. In...

Edward Dorsey is a part-time employee, and during the biweekly pay period he earned $395. In addition, he is being paid a bonus of $300 along with his regular pay. If Dorsey is single and claims two withholding allowances, how much would be deducted from his pay for FIT? (There are two ways to determine his deduction—do not use table for percentage method.)

a. Wage-bracket table $______________

b. Percentage method $______________

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Answer #1

a. Total wages for the bi weekly pay period = $395 + $300 = $695

Going through the table for wage bracket method for 2018 , the range falls between $680 - $700.

Since he is claiming 2 allowances, the taxwith holding is $23.

The table can be accessed through the IRS website :https://www.irs.gov/pub/irs-pdf/p15.pdf

b. Percentage method:

Total Wages paid
[395+300]		 695
Less:Allowances
[159.6*2]		 319.2
Taxable Pay 375.8

Tax to be deducted = (375.8 - 142) *10% = 233. 8 *10% = $23.38

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