Question

4-2A LO 3 See page 4-15 withhold from the wages or salaries of each employee Use the percentage method to compute the federal income taxes to No. of Withholding Allowances Employee Amount to Be Withheld Employee Marital Gross Wage or Salary No. Name Status Amoroso, A Finley, R. Gluck, E Quinn, S. Treave, Y $1,610 weekly 825 biweekly 9,630 quarterly 925 semimonthly 2,875 monthly 4 2 0 3 5 4 8 3 SHOW ME HOW 4-3A LO 3 See pages 4-15 and 4-16 Use (a) the percentage method and (b) the wage-bracket method to compute the federal income taxes to withhold from the wages or salaries of each employee. Amount to Be Withheld Wage-Bracket Method No. of Withholding Allowances Gross Wage Salary $ 675 weekly 1,960 weekly 1,775 biweekly 2,480 semimonthly 5,380 monthly Marital Percentage Method or Employee Corn, A Fogge, P. Felps, S Carson, W Helm, M. Status 2 S M 6 M 4 M MSSMM nun

Using 2016 Withholding rates.

Answer 1

	Use 2016 withholding rates for this problem
4-2A.	Under percentage method first we need to find the amount subject to withholding
					$
	Salary				xxx
	Less: allowance to be deducted				xxx
	(Value for one withholding allowance
	*no.of withholding allowance)
	Salary subject to withholding				xxx
	Then find the above computed salary falls into which tax bracket and apply respective %.
	Employee:1
	Marital status:M
	No.of withholding allowance=4
	Paid weekly
	Value of weekly withholding allowance=$ 77.90
					$
	Salary				1610
	Less: allowance to be deducted
	(77.90*4)				311.6
	Salary subject to withholding				1298.4
	This computed salary falls in Over $ 521 but not over $1613
	(Refer weekly percentage method table for married persons)
	Amount to be withheld=$35.70+15% on excess salary more than $521=35.70+(1298.4-521)*15%=$ 152.31
	Employee:2
	Marital status:S
	No.of withholding allowance=0
	Paid biweekly
	Value of biweekly withholding allowance=$ 155.80
					$
	Salary				825
	Less: allowance to be deducted
	(155.80*0)				0
	Salary subject to withholding				825
	This computed salary falls in Over $ 443 but not over $1535
	(Refer biweekly percentage method table for single persons)
	Amount to be withheld=$35.60+15% on excess salary more than $443=35.60+(825-443)*15%=$ 92.90
	Employee:3
	Marital status:S
	No.of withholding allowance=5
	Paid quarterly
	Value of quarterly withholding allowance=$ 1012.50
					$
	Salary				9630
	Less: allowance to be deducted
	(1012.50*5)				5062.5
	Salary subject to withholding				4567.5
	This computed salary falls in Over $ 2881 but not over $ 9975
	(Refer quarterly percentage method table for single persons)
	Amount to be withheld=$231.80+15% on excess salary more than $2881=231.80+(4567.5-2881)*15%=$ 484.775
	Employee:4
	Marital status:M
	No.of withholding allowance=8
	Paid semi-monthly
	Value of semi-monthly withholding allowance=$ 168.80
					$
	Salary				925
	Less: allowance to be deducted
	(168.80*8)				1350.4
	Salary subject to withholding				0
	Since allowance to deducted is more than salary,amount to be withheld=0.
	Employee:5
	Marital status:M
	No.of withholding allowance=3
	Paid monthly
	Value of monthly withholding allowance=$ 337.50
					$
	Salary				2875
	Less: allowance to be deducted
	(337.50*3)				1012.5
	Salary subject to withholding				1862.5
	This computed salary falls in Over $ 713 but not over $ 2258
	(Refer monthly percentage method table for married persons)
	Amount to be withheld=0+10% on excess salary more than $713=0+(1862.50-713)*10%=$ 114.95