Question

Federal Income Tax Withholding Bob Dunn's weekly gross earnings for the present week were $2,890. Dunn has four exemptions. Using the wage bracket withholding table in Exhibit 2 with a $75 standard withholding allowance for each exemption, what is Dunn's federal income tax withholding? Round your answer to two decimal places. $

Answer 1

As the wages is more than $1290( for year 2018) dollars we will use percentage method because as per rules if we cant use wage bracket tables because wages exceed the amount shown in the last bracket of the table, use the percentage method of withholding.

One withhold allowance for single weekly payroll as given is $75

Therefore for 4 it will be 75×4 = $300.

Therefore amount subject to withholding = $2890 - $300 = $2590

Tax to be withhild on $2590 assuming the year to be 2018:

$271.08 + (2590- 1658)×24% = $360 + $223.68

= $583.68

If the year was 2017,

$360 + (2590-1812) × 28% = $360 + $217.84

= 577.84

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