Question 11.2: Federal Income Tax Withholding Karen Dunn’s weekly gross ear...
Federal Income Tax Withholding
Karen Dunn’s weekly gross earnings for the present week were $2,250. Dunn has two 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?
Total wage payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,250
One allowance (provided by IRS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $75
Multiplied by allowances claimed on Form W-4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \underline{× 2} \underline{ 150}
Amount subject to withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \underline{\$ 2,100}
Initial withholding from wage bracket in Exhibit 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $356.90
Plus additional withholding: 28% of excess over $1,796 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \underline{85.12^{*} }
Federal income tax withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \underline{\$ 442.02}
*28% × ($2,100 – $1,796)