Question

Desiree is hired as a counselor making $35 per hour and is paid biweekly. She works 30 hours per week, is married but requested to have taxes withheld at the single rate. She also has no dependents. Her employer is offering health care benefits under a qualified cafeteria plan. Her contribution to the health plan will be $45 per pay period. She is also looking at changing her tax status to married when she signs up for the insurance. What is her net pay under the married or single rates (assume 3% state income tax rate, wage bracket tax table)?

Answer 1

Compute net pay as follows

Particulars	Single	Married
Gross Pay	$2,100	$2,100
Deduct: Contributions to health plan	($45)	($45)
Deduct: Federal income tax withholding	($262)	($177)
Deduct: State income tax withholding	($61.65)	($61.65)
Net Pay	$1,731	$1,816

Notes: Compute taxable wages as follows

Particulars	Amount
Gross earnings ($35 × 30 hours per week × 2 weeks )	$2,100
Deduct: Contributions to health plan	$45
Taxable wages for federal and state income taxes	$2,055

Compute state income tax withholding as follows

Particulars	Amount
Taxable wages	$2,055
× Withholding tax rate	3%
State income tax withholdings	$61.65

Determine the federal income withholdings using wage bracket table as follows

Income tax withholding for single person is $262 as the taxable wages falls in between $2,049 and $2,069 in the wage bracket table as shown below

Wage Bracket Method Tables for Income Tax Withholding SINGLE Persons—BIWEEKLY Payroll Period (For Wages Paid through December 2019) And the wages are- And the number of withholding allowances claimed is- At least But less 11 12 13 14 15 16 17 18 19 than The amount of income tax to be withheld is, 1,929 1,949 1,949 1,969 204 152 133 113 1,969 1,989 208 154 116 1,989 2,009 118 99 2,009 2,029 140 2,029 2,049 2,049 2,069 2,069 2,089 200 150 130 135 137 101 103 8 195

The income tax withholding for married person is $177 as the taxable wage is at least $,2044 but less than $2,064 as shown below

Wage Bracket Method Tables for Income Tax Withholding MARRIED Persons BIWEEKLY Payroll Period (For Wages Paid through December 2019) And the wages are- At least But less than And the number of withholding allowances claimed is- 4 5 6 7 O 1 2 8 9 10 The amount of income tax to be withheld is 146 148 151 127 129 131 71 153 134 136 155 158 160 139 141 1,784 1,804 1,824 1,844 1,864 1,884 1,904 1,924 1,944 1,964 1,984 2,004 2,024 2,044 2,064 1,804 1,824 1,844 1,864 1,884 1,904 1,924 1,944 1,964 1,984 2,004 2,024 2,044 2,064 2,084 107 110 112 114 117 119 122 124 126 129 131 163 143 100 102 105 107 109 João vow to 00000 00000 00000 00000 146 148 151 112 165 167 170 172 175 177 179 134 114 95 153 155 158 160 136 138 141 117 119 121 100 102