Question

Ohe bookmak PSa 3-6 Calculate Federal (Wage-Bracket Method), State, and Local Income Tax Withholding For each employee listed, use the wage-bracket method to calculate federal income tax withholding. Then calculate both the state income tax withholding (assuming a state tax rate of 5.0% of taxable pay, with taxable pay being the same for federal and state income tax withholding), and the local income tax withholding. Refer to Appendix A, 2018 Federal Tax Tables in your textbook. NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.

Answer 1

Dear Student,

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Part 1

Taxable earnings for federal income tax withholding , state income tax withholding and local income tax withholding   = 1224-(1224*12%) = $1077.12

federal income tax withholding (1077.12-505.62)*22%	$125.73
state income tax withholding (1077.12*5%)	$53.86
local income tax withholding (1077.12*0.9%)	$9.69

Part 2

Taxable earnings for federal income tax withholding , state income tax withholding and local income tax withholding   = 980-75 = 905

federal income tax withholding (905-621)*10%	$28.40
state income tax withholding (905*5%)	$45.25
local income tax withholding (905*2.3%)	$20.82