Question

Federal Income Tax Withholding

Bob Avery's weekly gross earnings for the present week were $2,740. Avery has three exemptions. Using the wage bracket withholding table in Exhibit 2 with a $75 standard withholding allowance for each exemption, what is Avery's federal income tax withholding? Round your answer to two decimal places.

Answer 1

I have used 2018 Wage bracket withholding table

Question is silent whether the Tax payer is single or married.So, I have done in bith ways

If the tax payer is single,

Weekly wage=$ 2740

Use withholding table for single person-Weekly payoll period

But, since the wage exceeds $ 1290, We have to use percentage method table for a single in a weekly payroll period

Computation:

$

$

Wage

1

2740

withholding allowance for each exemption

2

75

Exempions claimed

3

3

4=2*3

225

Wage subject to withholding

5=1-4

2515

Federal income tax to be withheld

Refer table

Wage comes between $1658-$3100

271.08+(2515-1658)*24%

476.76

Federal income tax to be withheld=$ 476.76

If the tax payer is married,

Weekly wage=$ 2740

Use withholding table for married person-Weekly payoll period

But, since the wage exceeds $ 1575, We have to use percentage method table for a married in a weekly payroll period

Computation:

$

$

Wage

1

2740

withholding allowance for each exemption

2

75

Exempions claimed

3

3

4=2*3

225

Wage subject to withholding

5=1-4

2515

Federal income tax to be withheld

Refer table

Wage comes between $1711-$3395

171.36+(2515-1711)*22%

348.24

Federal income tax to be withheld=$ 348.24