Question

Jane, who is expecting to finish college in May 2019, is fortunate to have already arranged full-time employment after graduation. She will begin work on July 1, 2019, as a staff accountant at a nearby professional services firm with a starting salary of $64,600 per year. Jane is married to Craig, who plans to be a full-time student throughout the year. They anticipate generating no income for the year other than the salary from her new position.
a. How many withholding allowances would you expect Jane to claim on her Form W–4?
b. Assuming that Jane and Craig use the standard deduction, calculate the Federal income tax liability on their projected taxable income for 2019. What advice would you give to Jane?
c. What further changes should she make to her W–4 at the beginning of 2020?

Answer 1

a)as per the given information jane is individual earner and she is married , jane holds only one job and jane husband is fulltime student and has no job

so Jane can apply these with holding allowances

One for herself

second for filling return jointly and had has one job and spouse doesn't work

third for filling return as married filling jointly

so jane can claim in her W-4 form total 3 allowances .

Answer b) Jane and craig Federal Tax Liability as married couple

Wages of jane from 1july to dec	$ 64600
less standard deduction	-$ 24400
Taxable income	$ 40200
tax liability on base income =10% of 19400= 1940	1940
tax liability on excess income = 40200-19400 = 20800 = 20800*12%	2496
federal tax liability	4436

answer c) jane should apply for the new redeisgn W-4 FORM IN Starting of 2020 so that withholding of tax will be calculated as per wage rate bracket , otherwise it will be calculated as per the previous year 2019 w-4 details ,

the benfit of w-4 2020is more simplified and withholding of tax is as per the wage rate bracket.